1. What is the IRS Sales Tax Deduction?

The IRS allows taxpayers to deduct either state and local income taxes or state and local sales taxes, but not both. The sales tax deduction can be calculated using either your actual expenses or the IRS's standard tables.

2. How Does the Calculator Work?

The calculator uses the IRS sales tax deduction formula:

Where:

• Actual Sales Tax Paid — Total sales tax you actually paid during the year
• IRS Table Amount — Standard amount from IRS tables based on your income, family size, and state

Explanation: You can deduct the lesser of your actual sales tax paid or the IRS table amount for your situation.

3. Importance of Sales Tax Deduction

Details: This deduction can significantly reduce taxable income for residents of states with no income tax or those who made large purchases subject to sales tax.

4. Using the Calculator

Tips: Enter your total actual sales tax paid and the IRS table amount for your situation. Both values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: Who should use the sales tax deduction?
A: Typically beneficial for residents of states with no income tax or those who made large purchases (like vehicles) subject to sales tax.

Q2: Where can I find the IRS table amounts for 2025?
A: The IRS will publish these amounts in Publication 600 before the 2025 tax filing season.

Q3: Can I add local sales tax to the IRS table amount?
A: Yes, you can add local sales tax amounts to the table amount if they're not already included.

Q4: What documentation do I need for actual sales tax?
A: Keep receipts for major purchases and any state-provided sales tax records.

Q5: Can I deduct both income tax and sales tax?
A: No, you must choose between deducting state/local income taxes or state/local sales taxes.