Question

Sales tax deduction

Forum|Forum|6 years ago
January 31, 2020
1 reply
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I have $26,000 in deductions. Turbo Tax Deluxe says I owe a federal tax of $99. When I add $5600 for sales tax to previous deductions ($31600 total deductions) , Turbo Tax says I still owe a federal tax of $99. Why?

ColeenD3

Not all deductions are equal. The SALT deductions have limited tax deductions.

The Tax Cuts and Jobs Act modified the deduction for state and local income, sales and property taxes. If you itemize deductions on Schedule A, your total deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if married filing separately.

In 2019, the IRS allows all taxpayers to deduct the total qualified unreimbursed medical care expenses for the year that exceeds 7.5% of their adjusted gross income. Beginning in 2020, the threshold amount increases to 10% of AGI.

In addition, there are no longer any employee business expenses that are deductible.

However, you may still be able to itemize on your state return.