I lived in 2 states last year. Texas then VT. Can I deduct prorated sales tax for Texas and VT income tax.?
I was in Texas for 8 months then we moved to VT (permanently) for the remainder of the year. Additional details. I am using Turbo Tax. Schedule A does not provide a way to combine prorated state sales tax and state income tax. It only has the options to choose one or the other or the greater of the two.
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- You were considered a part year resident of both states. As you work through the forms, they will adjust the amount of taxes based on the amount of time you spent in each state.
- No you have to choose between them. You can prorate the sales tax for the days spent in each state to see if it is higher that the VT state income tax. The link below is a calculator to figure out how much of a sales tax deduction you can claim. It can split between multiple places like TX and VT so you can get an accurate number. Update--- You have to choose between them. Either sales tax or state income tax. I am guessing, but I would bet that the sales tax deduction is higher because you lived in TX and they do not have an income tax.
- You have to choose between deducting sales tax or state income tax. Use IRS Publication 600 to determine the sales tax for each state. It will be pro-rated for both states. Then you can compare that number with the state income tax total to determine which is better for you.
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