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May 7, 2020
Question

My standard sales Tax deductions show $1,526 per Turbo Tax. My receipts show $4,000. Why does my Federal Refund remain the same ? It used to give me a huge difference.

  • May 7, 2020
  • 2 replies
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2 replies

rjs
Employee
May 7, 2020

The sales tax deduction will not change your refund unless your total deduction for state and local taxes is less than $10,000 ($5,000 if married filing separately) and your total itemized deductions are more than your standard deduction.


Under the new tax law, for 2018 through 2025, the deduction for state and local taxes is limited to a maximum of $10,000 per year ($5,000 if you are married filing separately). The maximum applies to the total of real estate tax, personal property tax, and either state and local income tax or state and local sales tax. The new law also made the standard deduction much higher, so your total itemized deductions might have been more than your standard deduction before 2018, but are now less than the increased standard deduction.

 

Employee
May 7, 2020

Your refund will remain the same until the total of all your itemized deductions total more than the standard deduction. The standard deduction doubled a year ago from what it was in prior years so many filers now find that the standard deduction is more than the itemized deductions.

 

You can deduct either sales taxes or state income taxes if your state has a state income tax but not both. You have a choice to use the table for sales tax deduction based on your income or to enter all your receipts if they are more than the table amount. There is a $10,000 limit for the total of sales or state income tax and property taxes.

 

See this for a description of what is included in itemized deductions: https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/what-are-itemized-tax-deductions/L1peC8cg0