Understanding the Sales Tax Deduction

Sales tax deductions are part of state and local tax (SALT) itemized deductions on Form 1040 Schedule A. Taxpayers can choose to deduct either state income tax or sales tax, but not both in the same year.
To claim sales tax deductions, taxpayers must opt for itemized deductions over the standard deduction. They can use actual receipts or the IRS Sales Tax Deduction Calculator to estimate eligible amounts based on purchases and residence.
U.S. taxpayers qualify if they itemize and live in a state with sales tax or choose it over income tax deductions. SALT deductions, including sales tax, are capped at $10,000 ($5,000 if married filing separately).
Sales tax deductions benefit those in no-income-tax states or with large taxable purchases. However, due to complexity and the SALT cap, most taxpayers prefer standard deductions unless itemized totals offer greater tax savings.