5. Remember that state tax you paid last spring?
Sounds odd, we know, but you’re going to thank us for this one. If you filed your 2020 state tax return in 2021, then you should include that sum alongside your state tax itemized deduction.
Don’t forget to also add your state income taxes held back from your paychecks. Since 2018, there’s been a limitation to a maximum of $10,000 per year when it comes to deductions for state and local taxes.
6. State sale taxes
This deduction is perfect for those citizens that live in the states with no income taxes. This goes for Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Normally, you would have to choose between having to deduct state and local income taxes or state and local sales taxes. For those citizens that live in income taxing states, the ideal choice would be the state and local income tax deduction.
Americans that live in income-tax-free states have two options to claim the sales tax deduction. You can either determine what you can deduct with the help of the tables provided by the IRS for your state. Or, the second option would be to keep track of all of the sales taxes that you paid throughout the year.
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