You can deduct state and local sales tax on Schedule A, not federal income tax.

Bria and Neil’s Schedule A moment isn’t about a big drama in the tax code. It’s a simple choice that-can-matter kind of decision: which tax do you get to deduct—state and local income tax or state and local sales tax? The answer in their case is the sales tax deduction. Let’s break down why that’s a smart pick and how the rules actually play out in everyday life.

What Schedule A is trying to do for you

Think of Schedule A as the place you decide what you can subtract from your income if you’re itemizing instead of taking the standard deduction. You don’t get to deduct every tax bill that hits your mailbox, though. The IRS gives you a choice, and that choice can tilt your tax bill one way or another depending on your situation.

Here’s the core idea: you pick one of two big buckets.

• State and local income taxes (or the tax you pay to your city and locality that’s tied to income)

• State and local sales taxes (the tax you pay when you buy most goods and some services)

You don’t get to deduct both. If you’re in a state with no or low income taxes, the sales tax route often comes out ahead. If your state has a hefty income tax, the income tax deduction might win. It’s all about which one yields a bigger number on Schedule A.

Why Bria and Neil chose the sales tax deduction

There’s a neat twist that makes the sales tax deduction appealing in many real-life cases. If you live in a state without a broad income tax, you’ll probably end up with a larger deduction from sales taxes. Even in states that do tax income, big purchases—think a new car, appliances, or major home improvements—can push sales tax past the amount you’d save by deducting income tax.

Let me explain with a simple way to picture it. Imagine you bought a car and a bunch of big-ticket items during the year, and your receipts show you paid a lot in sales tax. In some years, those receipts add up to more than your state and local income tax would have. If you’re itemizing, you can use either the actual receipts or the IRS-provided tables to estimate your sales tax, and that total becomes the number you put on Schedule A.

Two ways to calculate it

IRS gives you options, and that flexibility is the reason we even talk about this in plain language.

• Actual receipts method: You keep track of everything you paid in sales tax (from receipts and purchases specifically). You add it up to get your deduction.

• IRS tables method: If your receipts are scattered or you don’t have the receipts for every purchase, you can use tables the IRS provides. Those tables estimate your sales tax based on your income and the state you live in.

Both paths are legitimate, and you pick the one that’s easier for you. The key is staying consistent and keeping good records, because the tax man might ask to see them.

When sales tax makes more sense

• You live in a state with no or low income tax. No income tax means the income tax deduction is basically a non-starter, so the sales tax deduction often wins by default.

• You’ve made big purchases with high sales tax. A new car, a major remodel, or pricey electronics can push your sales tax deduction past the amount you’d save with income tax.

• Your state’s tax rules are quirky, or you’ve got unusual local taxes. Sometimes the simple “sales tax paid” figure, especially when you’ve got a lot of taxing events in a year, tips the scale.

Medical expenses—where they fit in

Medical expenses can be itemized too, but they aren’t a straight, clean subtraction. They’re deductible only to the extent that they exceed a floor tied to your adjusted gross income (AGI). It’s a bit of a slog to get there, and the threshold isn’t a slam dunk for most households. If your medical costs are substantial, they can be worth tallying, but they come with caveats that can slow their usefulness compared to the straightforward sales tax deduction in many cases.

What about the other options in the multiple-choice setup?

• Federal income tax: Not deductible on Schedule A. This one trips people up because “tax” and “deduction” sound like they should go together at first glance. But federal taxes aren’t something you deduct on Schedule A; they’re already calculated as part of your federal return.

• Car loan interest: Personal interest like car loan interest isn’t deductible on Schedule A. Interest on a mortgage is a different story, but car interest is typically a personal expense, not a deductible item.

• Medical expenses (we just covered this as a subset of itemized deductions): They’re deductible only above a certain AGI threshold, which makes them less predictable than the sales tax route in many situations.

The practical takeaway for Bria and Neil—and for you

• You don’t need to memorize a ton of precise numbers to get the idea. The big picture is: you choose between two big deduction buckets, and sales tax is a viable option when it beats the income tax deduction or when you’re in a no-income-tax state.

• You can work with actual receipts or IRS tables to estimate the deduction. Pick the method that minimizes paperwork while maximizing the deduction.

• Medical expenses exist, but they’re more constrained. They can help in some years, but they aren’t a reliable go-to for everyone.

A few mental models to keep in mind

• The “big purchases” lens: If your year was heavy with big-ticket items, sales tax might be your friend. Those purchases push the sales tax deduction higher, sometimes well beyond the income tax route.

• The “no-income-tax state” mazel: If your state doesn’t tax income, the sales tax deduction becomes almost a no-brainer because there’s no competing income tax deduction to compare against.

• The “records habit” discipline: Whether you’re using receipts or tables, good record-keeping pays off. It’s one of those boring-but-crucial parts of personal finance that saves you trouble at tax time.

A friendly analogy to anchor the idea

Think of it like choosing between two options on a road trip. You can take the highway (income tax deduction) or the scenic byway (sales tax deduction). The highway might be faster and simpler in some places, but the scenic route can offer you more small, meaningful sights—or in tax terms, more deductions—depending on your route that year. The trick is knowing which road is longer or more scenic for your exact start point and destination.

Putting it into a real-world vibe

If you’re a student exploring Intuit Academy Tax Level 1 concepts, you’ll notice the logic isn’t about clever tricks. It’s about understanding what’s allowed, what isn’t, and how the numbers line up in real life. It’s easy to get lost in the jargon, but the core idea is straightforward: you compare the two big deduction options, pick the one that yields the larger benefit, and keep good records to back it up.

Bringing it back to Bria and Neil

In their case, the state and local sales tax deduction is the one that aligns with their financial reality. They have enough sales tax to make the deduction meaningful, and they live in a way that doesn’t push a large income tax deduction into the same yardarm. That simple choice—choosing sales tax on Schedule A—illustrates a practical pattern: the best deduction isn’t always the most obvious one at first glance. It’s the one that looks best when you lay out the receipts, the tables, and the numbers side by side.

A concise recap you can carry forward

• Schedule A lets you itemize and choose between state/local income taxes or sales taxes.

• Bria and Neil’s favorable option is the state/local sales tax deduction.

• You can estimate it via actual receipts or IRS tables.

• Medical expenses have a limited deduction scope tied to AGI, so they’re not always a slam dunk compared to sales tax.

• Car loan interest isn’t deductible as personal interest on Schedule A.

• The key is comparing the two big options and keeping solid records so you can prove your numbers if needed.

If you’re mapping these ideas for your own tax curiosity, remember this: the value of the deduction isn’t just about the rate. It’s about how the numbers line up for your life’s purchases, your state’s tax stance, and your record-keeping discipline. When you see the rules laid out like that, the world of Schedule A starts to feel less abstract and a lot more like a practical tool you can use with confidence.

So next time you’re weighing deductions, ask yourself: am I better off deducting state and local income taxes or sales taxes? If your receipts and the tables point to sales tax, you’ve got a clean, defensible choice that matches Bria and Neil’s example—and that’s a solid win in the real world of tax planning.