Entering local sales tax rates for Schedule A, Line 5 in Lacerte

This article will help with entering local sales tax rates for Schedule A, Line 5 (Form 1040). Lacerte uses the tables on pages A-11 through A-13 published in the Schedule A instructions for the state sales tax.

Lacerte uses the state from Screen 1, Client Information, in the Resident state as of 12/31/XX field to calculate the state tax rate.

To use the same local rate on all tax returns:

1. Go to Settings > Options and select the Tax Return tab.
2. Select Federal Tax Options from the left section menu.
3. Enter the rate in the Local Sales Tax Rate (.xxxxxx) field.

To apply a rate to a single return only:

1. Go to Screen 25, Itemized Deductions (Sch. A).
2. Scroll down to the Taxes section > Optional Tables.
3. Under Location on 12/31/XX, enter the rate in the field Local rate (.xxxxxx) [O], code 501.

The local tax rate found in the state's tax tables must be adjusted by reducing it by the amount of the state tax rate. For example, if the state tax rate is 4.0, and the local rate on tables is 8.5, the local rate entered should be 4.5 (adjusted).

If the taxpayer lived in multiple locations, the rate entered in this field should be the rate that the taxpayer was subjected to on 12/31. Generally, the local rate is used in conjunction with the state rate to compute a ratio that is then applied to the appropriate amount per the Optional Sales Tax Tables.  Lacerte generates a worksheet showing this calculation.

Special locality as of 12/31/20XX (table) [O]

• An entry in this field overrides the program's automatic determination on when to use Optional Local Sales Tax Tables A, B, C, or D. 
• For additional information, refer to "Which Optional Local Sales Tax Table Should I Use?" in the Schedule A instructions on page A-13.

Prior location

• This input should be used if the taxpayer moved during the year. 
• If the taxpayer moved, enter the two-letter state abbreviation of the state that the taxpayer moved from.

To enter prior location rates:

1. Go to Screen 25, Itemized Deductions (Sch. A).
2. Scroll down to the Taxes section > Optional Tables.
3. Locate the Prior Location subsection.
4. Enter the state and the rate in the field Local rate (for computing local taxes) (.xxxxxx), code 503.
5. Enter the Special locality if applicable, and number of days.

• The Special locality field should only be used if the taxpayer moved and before the move, the taxpayer was a resident of Arizona, California (Los Angeles County only), Colorado, Louisiana, Missouri, New York, South Carolina, or Salem County, New Jersey. Select the location from the table that corresponds to the taxpayer's prior residence.