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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I just built a house this year and acted as own GP. I paid

Customer Question

I just built a house this year and acted as own GP. I paid sales tax on everything except for about 80,000.00 in contracted labor cost. The total cost of the home was 381,500.00. Can I use state sales tax instead of state withholdings on my federal taxes under deductions. If so is there a percentage that can be used or can I use all of it. My state has a 6% sales tax.
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
HelloCustomer

Yes, you may take a deduction for sales tax instead of state and local income tax withholding. You are allowed to claim your actual expenses, and there is no limitation.

Please refer to page A-5 of the following instructions for Schedule A. Refer to the instructions for line 7, item 3, and it specifically addresses sales tax on materials used to build a new home.

http://www.irs.gov/pub/irs-pdf/i1040sa.pdf

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Thank you.
Expert:  Merlo replied 7 years ago.
Hello again weaver,

I forgot to mention that the instructions I am referring to above are for line 7 of the worksheet. Look in the first column on page A-5 for this information, line 7, item 3.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.