1. What is the IRS Sales Tax Deduction?

The IRS Sales Tax Deduction allows taxpayers to deduct either state and local income taxes or state and local sales taxes, but not both. This calculator helps determine the deductible amount based on the IRS guidelines for 2025.

2. How Does the Calculator Work?

The calculator uses the IRS deduction formula:

Where:

• Table Amount — The standard amount from IRS tables based on income, family size, and state
• Actual Sales Tax — The total sales tax actually paid during the tax year

Explanation: The deduction is the lesser of either the table amount provided by the IRS or your actual sales tax paid.

3. Importance of Sales Tax Deduction

Details: This deduction can significantly reduce taxable income, especially for residents of states with no income tax or those who made large purchases during the tax year.

4. Using the Calculator

Tips: Enter the table amount from IRS publications and your actual sales tax paid (from receipts or records). Both values must be non-negative USD amounts.

5. Frequently Asked Questions (FAQ)

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

Q2: 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.

Q3: What purchases qualify for actual sales tax deduction?
A: Most retail purchases qualify, except for certain items like food, drugs, and services.

Q4: How do I get the table amount?
A: The IRS provides tables in Publication 600 based on income, family size, and state of residence.

Q5: Are there limitations to this deduction?
A: Yes, the total state and local tax (SALT) deduction is capped at $10,000 ($5,000 if married filing separately).