Deducting sales tax and property tax on your federal return

Sales tax or income tax: the choice

The deduction for state and local general sales taxes exists as an alternative: you take it instead of the deduction for state and local income taxes, never in addition. For most people in a state with an income tax, income tax withheld is larger and the choice is easy. The sales tax option matters in two situations. If you live in a state without a broad income tax, there is nothing on the income tax side, and sales tax is the only general tax you can claim. And in a year with an unusually large purchase, the sales tax on a vehicle, a boat or a home renovation's materials can exceed the income tax you paid. A $35,000 car in Tennessee, for example, carries $2,450 of state sales tax before local tax.

Actual receipts or the IRS tables

You may total the sales tax on your actual receipts for the year, which requires keeping them. Or you may use the optional sales tax tables published with the Schedule A instructions, which estimate the general sales tax a household of your income and size pays in your state and locality. The IRS Sales Tax Deduction Calculator applies those tables to your ZIP code, so the local rate is counted too. With the table method, you may add the actual sales tax paid on certain large items on top of the table amount: a motor vehicle (only up to the tax at the general rate, if its rate was higher), an aircraft or boat taxed at the general rate, or a home or major addition when the materials were taxed at the general rate. Whichever you use, the deduction is the sales tax you paid, at the rate charged, not the price of the goods.

Property tax counts in the same cap

Real estate taxes on your home and personal property taxes based on the value of a car or boat, charged yearly, are deductible in the same Schedule A section. The IRS excludes charges that are not taxes, such as water, sewer or trash fees, homeowner's association dues, and assessments for local benefits like a new sidewalk (except the part for maintenance or interest). Transfer taxes paid when you buy or sell a home are not deductible as taxes either. The property tax figures on each state page of this site are typical bills; the deductible amount is what you actually paid in the year, often shown on the escrow statement from your lender.

The cap and the income limit

The combined deduction for income or sales taxes and property taxes is limited to $40,000, or $20,000 for married people filing separately. The IRS adds that the limit is subject to a modified adjusted gross income limitation and is not reduced below $10,000; the Schedule A instructions give the computation for the 2025 returns. In high-tax states, property tax alone can approach the limit, in which case the choice between sales and income tax no longer changes anything. The mini-calculator above adds your two figures and shows what fits under the limit; it does not apply the income-based reduction.

Is itemizing worth it?

Only if your itemized deductions together exceed the standard deduction for your filing status, which most households do not. State and local taxes, mortgage interest and charitable gifts are the usual components. Run your numbers in tax software or with a preparer; this page only explains how sales tax and property tax fit in.

Where this site helps

The sales tax calculator gives the sales tax on a large purchase in any state with your local rate, the property tax calculator estimates a bill before you have one, and the states with no sales tax, Alaska, Delaware, Montana, New Hampshire and Oregon, are covered on their own page. In those states there is little or no general sales tax to deduct, so income tax, if any, is normally the better option.