Schedule A Line 5a help needed - confused about instructions

So what's better to claim - income tax or sales tax? I make about 80k and live in Tennessee if that matters.

For most people who live in states with income tax, claiming state income tax is usually more beneficial. But since you're in Tennessee, which doesn't have a general income tax on wages (just on certain investment income), you'd likely benefit more from claiming sales tax. You have two ways to calculate the sales tax deduction: either add up all the sales tax from receipts you kept throughout the year (which most people don't do), or use the IRS Sales Tax Deduction Calculator which estimates your deduction based on your income and location. You can add any sales tax from major purchases like vehicles or home improvement materials on top of the IRS estimate.

Does it work with all tax forms or just Schedule A? I've got some self-employment stuff that's been giving me headaches too.

How does it actually figure out which is better for you? Does it somehow connect to your financial data or do you still have to input all your info manually?

It works with pretty much any tax form - Schedule C for self-employment, Schedule E for rental income, all the 1099 variations, and definitely the basic forms like 1040 and Schedule A. You just take a picture or upload a PDF of the form you're confused about and it breaks everything down. For determining which option is better, it asks you a few simple questions about your state, income level, and major purchases, then calculates both options and shows you which gives the bigger deduction. You don't have to manually input all your receipts or anything like that. It uses the same tables the IRS uses but makes the comparison super easy to understand.

Wait, how does this actually work? Do they have some secret IRS phone number or something? I've been on hold for literally 2+ hours multiple times.

Sorry but this sounds like BS. Nobody gets through to the IRS that quickly, especially during tax season. I'll believe it when I see it - the IRS phone system is fundamentally broken.

They don't have a secret phone number - they use technology that continually redials and navigates the IRS phone tree for you. Once they get through, they call you and connect you directly to the IRS agent. It's all automated so you don't have to sit there repeatedly calling. The reason it works is because their system can make hundreds of call attempts while you're going about your day, then it only notifies you once it actually gets through to a human. And yes, it absolutely works even during tax season - that's when I used it. The system actually works better than trying yourself because it can instantly redial when it hits a busy signal, which is way faster than a human could do it.

Question: if I paid state taxes when I filed last year (April 2024 for tax year 2023), which tax year does that count for on Schedule A - 2023 or 2024?

It counts for the year you actually paid it. So if you paid additional state taxes in April 2024 when you filed your 2023 return, that payment would be a deduction on your 2024 Schedule A (the return you'll file in 2025). This is a common misunderstanding! The rule is that you deduct state and local income taxes in the year you actually pay them, not the tax year they apply to. So keep those payment records handy for this year's taxes.

You usually have two options for foreign taxes - you can take a credit using Form 1116 OR deduct them on Schedule A. The credit is generally better because it reduces your tax directly rather than just reducing taxable income. But it depends on your specific situation.