Sales Taxes Deduction

The Optional Sales Tax Tables

The optional Sales Tax Tables found in IRS Publication 600, Optional Sales Tax Tables or the IRS has a sales tax calculator on their website at http://apps.irs.gov/app/stdc/.

If you use these sales tax tables above, you can add to the amount calculated any state and local general sales taxes you paid on a motor vehicle, boat, aircraft, home (including mobile and prefabricated) or home building materials.

How much can sales taxes can I deduct?

The deductible amount of tax on motor vehicles cannot exceed the tax that would have been imposed at the general sales tax rate.

For an aircraft, boat, home or home building materials, the tax is deductible only if it was imposed at the general sales tax rate.

To use the tables you will need to determine your available income for the tax year. Total available income is the amount on form 1040 line 38 (adjusted gross income) plus any nontaxable items such as:

• tax exempt interest,
• veterans' benefits,
• nontaxable combat pay,
• workers compensation,
• nontaxable part of an IRA, pension or annuity distributions (do not include IRS rollovers),
• public assistance payments.

The exemptions column refers to the number of exemptions claimed on form 1040 line 6d but not additional exemptions for individual displaced by Hurricane Katrina. Do not include sales taxes paid on items used in your trade or business.

How to claim the sales taxes deduction?

To claim the sales taxes deduction, on Schedule A line 5 State and Local income taxes, enter "ST" on the dotted line to the left of line 5 to indicate you are claiming the general sales tax deduction and not the deduction for state and local income tax.