Common questions for Schedule A Itemized Deductions- Taxes in ProConnect Tax

 How to deduct state and local sales tax in ProConnect

Taxpayers have the option of deducting state and local sales taxes, instead of state and local income taxes, as an itemized deduction on Line 5 of Schedule A.

ProConnect Tax automatically optimizes between the greater of sales tax or income tax. To override the optimization:

1. Go to the Input Return tab.
2. Under the Deductions section, select Itemized Deductions (Sch A).
3. Select Taxes section from the top of the screen.
4. In the input field, enter:
   • 1 for force income tax
   • 2 for force sales tax
   • Leave the field blank to optimize

To calculate the deduction:

To calculate the state and local sales tax deduction, a taxpayer can use actual expenses or the Optional State Sales Tax Tables.

ProConnect Tax automatically optimizes between state and local sales taxes paid, and taxes calculated using the table method. To override the optimization:

1. Go to the Input Return tab.
2. Under the Deductions section, select Itemized Deductions (Sch A).
3. Select Taxes section from the top of the screen.
4. Scroll to the Sales and Use Taxes section.
5. In the input field, enter:
   • 1 for force actual
   • 2 for force tables
   • Leave the field blank to optimize

For more information on calculating sales tax deduction using the Sales Tax Tables, refer to the IRS instructions for Itemized Deductions and the IRS Sales Tax Deduction Calculator.