How to Deduct Sales Tax: Tables, Receipts, and the SALT Cap

To deduct sales tax on your federal return, you itemize on Schedule A (Form 1040), check the box on line 5a to elect state and local general sales taxes instead of state and local income taxes, and enter either your figure from the IRS Optional Sales Tax Tables or the total from your actual receipts. You can add the actual sales tax paid on certain major purchases on top of the table amount. The result gets combined with your property taxes and capped under the SALT limit, which is $40,400 for most filers in 2026.¹

First, Confirm Itemizing Beats the Standard Deduction

The sales tax deduction only helps if your total itemized deductions exceed the standard deduction for your filing status. For 2026, that standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.¹ Below those thresholds, none of what follows moves your tax bill.

If you do itemize, you have to choose: state and local sales taxes or state and local income taxes. Not both.² Residents of the nine states without a state income tax have no real choice, since income tax withholding is zero. Everyone else should run the numbers both ways, especially in a year with a large taxable purchase. In high-income-tax states, income tax withholding usually wins; in moderate-tax states, sales tax can pull ahead once you add a vehicle or a renovation.

Choose Your Calculation Method: Tables or Actual Receipts

You can calculate your general sales tax deduction two ways. Most people use the IRS Optional Sales Tax Tables in the Schedule A instructions.² The tables estimate your sales tax spending on ordinary purchases using three inputs: your state of residence, your adjusted gross income range, and the number of dependents you claim.

If your area imposes a local sales tax on top of the state rate, you also use the Optional Local Sales Tax Tables. You look up the base local figure, then multiply it by your actual local sales tax rate. Add that product to your state table amount.³ Combined state and local rates run above 10% in some jurisdictions, so the local add-on matters.

Moved during the year? You prorate each state’s table amount by the number of days you lived there divided by 365, and do the same for local amounts if you also changed localities. Fill out a separate worksheet for each state and combine the prorated figures.³

The IRS also runs a free Sales Tax Deduction Calculator that walks through the same computation online.⁴

The alternative is totaling actual sales tax from every taxable purchase you made all year.⁴ This method can produce a larger deduction if you made many large purchases or live in a high-rate area, but it demands receipts for everything. For most people the tables plus receipts for major items capture nearly all the benefit with far less work.

Either way, only general sales taxes count. A general sales tax is one imposed at a single rate on a broad range of retail items.⁵ Selective taxes on specific goods, like hotel occupancy or tobacco excise taxes, don’t qualify even when they appear on your receipts.

Add the Sales Tax From Major Purchases

If you use the table method, you can add the actual sales tax paid on certain big-ticket items on top of the table amount. The qualifying categories are narrow:²

Motor vehicles, including cars, trucks, motorcycles, motorhomes, recreational vehicles, SUVs, vans, and off-road vehicles. Sales tax on a leased motor vehicle also qualifies.⁶
Boats and aircraft, but only if the sales tax rate charged was the same as the general sales tax rate.
Building materials for a new home, a substantial addition, or a major renovation, again only if the tax rate matches the general rate. If a contractor bought the materials, you can still claim the tax as long as the contract designates the contractor as your agent authorized to act on your behalf.²

A limit worth knowing: when a state charges a higher sales tax rate on motor vehicles than on general retail purchases, you can only deduct the amount you would have paid at the general rate. The excess is disregarded.⁵ Luxury taxes and special excise taxes that sit outside the general sales tax framework don’t count at all.

Compensating use taxes do count. If you bought something out of state and your home state charged you a use tax, it’s treated the same as a general sales tax, as long as it’s complementary to the state’s retail sales tax.⁵ This comes up most often with cross-state vehicle purchases.

You need the receipt, invoice, or closing document showing the exact tax paid on each qualifying item, even though you’re using the simplified table for everything else.

Apply the SALT Cap

Your sales tax deduction doesn’t stand alone. It combines with your state and local property taxes under a single cap. The One, Big, Beautiful Bill Act, signed July 4, 2025, raised that cap from $10,000 to $40,000 for 2025, with annual inflation indexing.⁷ For 2026 the cap is $40,400, or $20,200 if you file married filing separately.¹

Higher earners face a phasedown. Once modified adjusted gross income exceeds $505,000 for 2026 ($252,500 for married filing separately), the cap gradually shrinks until it reaches $10,000 ($5,000 for married filing separately).⁷

Practical effect: precision on your sales tax figure matters most when your property taxes plus sales (or income) taxes fall below the cap. If your property taxes alone already reach $40,400, the sales-versus-income tax choice doesn’t change your deduction because you’ve hit the ceiling anyway.

Enter It on Schedule A and Keep Your Records

Your final figure goes on line 5a of Schedule A. Check the box on that line to indicate you’re deducting sales taxes rather than income taxes.⁷ The number you enter is the total from the State and Local General Sales Tax Deduction Worksheet: your table amount (or actual receipts total), plus the local add-on, plus actual sales tax from qualifying major purchases. That figure then feeds into the SALT limitation on Schedule A, where it gets added to your property taxes and capped.

The IRS doesn’t want your worksheets, tables, or receipts attached to the return. But you have to keep them. That means the completed worksheets, the table figures you used, and every receipt for a major purchase claim. Hold onto these for at least three years from the date you filed, or two years from the date you paid the tax, whichever is later.⁸ If you can’t produce documentation during an audit, the IRS can disallow the entire deduction.

One Caution: The AMT Erases This Deduction

If you end up subject to the Alternative Minimum Tax, the deduction for state and local taxes, including the sales tax deduction, is disallowed in full for AMT purposes.⁹ The higher SALT cap makes a larger regular-tax deduction attractive, but the same larger deduction widens the gap that AMT is designed to close. If your income sits near the AMT phaseout thresholds, run the AMT calculation before assuming your sales tax deduction will actually cut your tax bill.

1
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
2
Internal Revenue Service. Instructions for Schedule A (Form 1040) (2025)
3
Internal Revenue Service. 2025 Instructions for Schedule A (Form 1040) – Itemized Deductions (Draft)
4
Internal Revenue Service. Sales Tax Deduction Calculator
5
Office of the Law Revision Counsel. 26 USC 164 – Taxes
6
Internal Revenue Service. Publication 17 (2025), Your Federal Income Tax
7
Internal Revenue Service. 2025 Instructions for Schedule A (Form 1040)
8
Internal Revenue Service. How Long Should I Keep Records?
9
Office of the Law Revision Counsel. 26 USC 56 – Adjustments in Computing Alternative Minimum Taxable Income