1. What is Sales Tax Deduction?

The sales tax deduction allows taxpayers to deduct either state and local income taxes or state and local sales taxes, but not both. The IRS provides tables with estimated sales tax amounts based on income and family size.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Actual Tax Paid — Total sales tax you actually paid during the year
• IRS Table Amount 2025 — The amount from IRS tables based on your income and family size

Explanation: You can deduct the lesser of your actual sales tax paid or the amount from IRS tables.

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 amount from IRS tables. Both values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: Who should consider taking the sales tax deduction?
A: Residents of states with no income tax or those who made large purchases (like vehicles or home improvements) may benefit more from sales tax deduction.

Q2: Can I deduct both income tax and sales tax?
A: No, you must choose between deducting state and local income taxes or sales taxes, but not both.

Q3: How do I find the IRS table amount?
A: The IRS publishes annual tables in Publication 600 based on income, family size, and state of residence.

Q4: What purchases can be added to the table amount?
A: Major purchases like cars, boats, and home building materials can be added to the table amount if you have receipts.

Q5: Is there a limit to this deduction?
A: Yes, the total state and local tax deduction (including property taxes) is capped at $10,000 ($5,000 if married filing separately).