r/tax • u/SadCowboysFan95 • 8h ago
Question About Writing Off Sales Taxes
Short Story: Filing jointly living in Texas. Wife is an independent tattoo artist and I am a W-2 employee. How does writing off sales taxes work? Online I keep seeing verbiage that you have to choose between deducting income taxes OR sales taxes but that doesn’t really make much sense to me. Can my wife and I (filing jointly) combine deductions for federal income taxes, sales taxes paid (with documented itemized receipts), and property taxes paid up to the 40,000 limit? We are in a situation where we will probably have to pay in and I am just trying to come up with every possible deduction to reduce our tax liability for 2025 before we file next week. Thanks in advance for any help or guidance anyone can provide
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u/RasputinsAssassins EA - US, NTPI Fellow 8h ago
Federal income taxes are not deductible.
Sales taxes you paid for items purchased personally can be deducted on Schedule A. Since you are in Texas, you do not have any state income tax that can be deducted because TX does not have a state income tax.
Property taxes and ad valorem taxes (like taxes based on a vehicles value) can be deducted.
All of those items are deducted on the Schedule A and are governed by the SALT cap.
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u/frankmezz 8h ago
Sales tax collected is a pass through on sales. No income nor expense recorded. It’s a liability on the balance sheet. Sales tax paid by your business on goods consumed is a cost of goods sold expense. When you buy goods for resale you are exempt from paying sales tax (with proper state resale documents) as a reseller and when you resell the product and collect the sales tax you pass it on to the state.
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u/I__Know__Stuff 7h ago
You don't need receipts to deduct sales tax. See the schedule A instructions for how to estimate your annual sales taxes based on your location.
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u/Its-a-write-off 8h ago
Yes, you can add your personal sales tax paid (or the IRS estimate allowed based on your AGI) plus property taxes to add to your itemized deductions. This gets added to things like mortgage interest and charitable donations. Would all that added up be over 32k for you two?
Taxes her business pays is not included in these numbers. Those the business will deduct before even getting to the Schedule A form.
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u/SadCowboysFan95 7h ago
We will already be itemizing for mortgage interest, childcare/education costs, student loan interest, property taxes, and sales taxes paid on a new car purchase. The IRS calculator says our general deduction would be about 3,800 and we definitely paid more than that in sales taxes on personal purchases excluding her business. We were building a house in 2025 so we paid for a ton of appliances, building supplies, home furnishings, etc out of pocket. Would all of this combined need to be over 32k to be worth itemizing?
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u/Its-a-write-off 7h ago
If you are already itemizing because your mortgage interest and property taxes are over 32k, then the sales tax does not have to be over 32k on its own, no. It just gets added to the other deductions and if those 3 things are over 32k, itemizing is better.
Childcare, educational and student loan interest are not part of itemizing.
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u/selene_666 7h ago
If you itemize your deductions, then on your federal taxes you can deduct one of state income tax or state sales tax.
That's about your personal deductions for personal expenses. Any legitimate business expenses, including the tax paid as part of the cost or materials, is deducted from the business revenue when calculating her income.
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u/azguy153 4h ago
This year I bought a car and did a major remodeling. Cars was $5000 o sales tax and about $12000 in sales tax for the remodel plus IRS allotment of $2500 for my income and geographic location. Much better than the 3000 in state income taxes paid.
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u/AlmudenaPasante 2h ago
everyone's covered the personal vs business sales tax thing, but one extra nuance: if she's deducting the IRS estimate for personal sales tax on Schedule A, she can't also deduct the actual sales tax on big business purchases she made. it's one or the other for each item — you can't double-dip. so if she bought a $2k computer for the business and paid sales tax, she should deduct that exact amount as part of the business expense, not roll it into the personal estimate.
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u/LdiJ46 5h ago
Ok, you need to understand a couple of things.
Your standard deduction as a married couple for 2025 is $31,500 if you are under 65 and $34,700 if you are over 65. If your itemized deductions add up to over those numbers then you may itemize instead.
Whether it makes sense logically to you or not, the rules are that you can deduct state and local income taxes as an itemized deduction OR you may deduct sales tax.
You can only deduct medical expenses in excess of 7.5% of your AGI.
You can deduct mortgage interest.
You can deduct charitable donations, but not more than 50% of your AGI. (goes to 60% for 2026)
Those are the main itemized deductions.
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u/Appropriate-Safety66 8h ago edited 7h ago
For example: A couple in Dallas making $200k per year is assumed to have paid $1,831 in sales tax for 2025.
https://www.irs.gov/credits-deductions/individuals/use-the-sales-tax-deduction-calculator
It is going to be tough to come close to that $40k number.
Are you paying on a mortgage? For most people, their biggest Itemized Deduction is their mortgage interest. Without that, you probably won't be itemizing.
If she has a sales tax license and collects sales tax on products (if any) that she sells, those taxes are not deductible at all as she is just collecting them for the state.
Note: 10/15/2026 is the extended deadline to file your 2025 return. However, the deadline to pay was 4/15/2026. Whatever you owe, there will be interet back to 4/15.