Ex: if I buy a sander to address stains from tenants on a wood floor can I deduct the cost of belt sander from the deposit?

That would shake me certainly.Draft that nice letter, honor your suggested option of first option if you want to sell, (integrity matters whether in writing or not), and if you decide to move back in to your home prepare yourself for a few dinged walls and stained floors!  

They will shampoo as required by the lease before leaving for Texas (they even said so), but judging by the type and amount of stains on what was spotless carpet before, I feel it's more likely it will need to be replaced. 

Smoke stains are not a known health hazard. 

Their lease is over the day they left,  you can charge them rent up to that day, on an eviction, not till the end of the month.2.Nicotine stained walls is something you can charge for, so I usually charged an extra $250.00 for just that.3. you need to send them a move out statement regarding their security deposit.. you charge for any rent owed, legal fees/court costs, and damages over and above normal wear and tears.

As long as they are not damaging it (no holes in walls, windows are intact, no major stains on flooring) and keeping it fairly clean that should be enough.

look at the walls or drapes in the rentals. smoking will eventually lead to nicotine stains on the either.

Besides the cat piss stain that was recent (within an hour) by the front door, on the carpet, the girls bedrooms, one of them anyways, had several stains on the carpet.

We are stubborn, hard headed, and nothing will get in our way.

Are they going to blame the landlord for hard water stains on their favorite sweater?...