State sales taxes

This example probably makes a lot of sense for those who live in several specific states that don’t impose an income tax. And by that, we mean Alaska, Florida, Nevada, New Hampshire, Tennessee, South Dakota, Washington, Texas, and Wyoming.

I know you’re probably wondering how is this a factor. Well, you have to choose between deducting state and local income taxes, or even state and local sales taxes. For the majority of people that live in income-taxing states, the state and local income tax deduction is probably the best deal.

But for those of you who live in an income-tax-free state, there are two ways in which you can claim the sales tax deduction on your tax return. First, you can use the IRS tables that have been provided for your state, in order to understand what is there to deduct.

Plus, if you purchased an asset, anything from a vehicle, a boat, an airplane, a home, or even a huge home renovation project, you’re able to add the state sales tax you have already paid for on these big-ticket items. Of course, to the amount that you see on the IRS tables, up to the limit of the state you live in.