6 Best Tax Deductions for 2019 to Take Advantage Of

5. State and local taxes

You might remember that for the tax year 2017 and many previous years, you could deduct the state and local income tax you paid during the tax year or the state and local sales tax you paid – but not both.

That has changed starting with the 2018 tax year. Your total deduction for state and local taxes is now capped at $10,000. That might seem generous but remember that many people pay much more than that just in property taxes while other people live in states with steep state income tax rates.

Still, the deduction can permit you to shrink your taxable income by up to $10,000. You just need to determine whether your state and local income taxes or sales taxes were higher, and which one to deduct.

The IRS offers an online sales tax calculator to help you come up with an acceptable estimate of what you can deduct. (If you use it, be sure to add in sales tax paid for any major purchases such as a car or refrigerator.)

If you pay significant state income taxes that’s probably your better option. But if your state imposes no income tax, or you made an especially big purchase during the year, the sale-tax option might be more beneficial.