Bought a 50K car in FL in Feb 2017. Car is registered in FL and stays in FL full time. I live in MA 7 months and FL 5 months. I file my taxes in MA. Is the sales tax I paid on car, deductable on my Fed forms?
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Yes. It's a federal deduction, so it doesn't matter where you live. You are allowed to deduct state & local income taxes OR sales tax; but not both. This provision was added primarily to allow a deduction for people in states without income tax. Sometimes, with a big purchase (like a car), you may be better off deducting sales tax even if your state has an income tax. Enter both, under deductions, and TT will calculate the best option. If you don't have all your receipts (and hardly anybody does), you are allowed to use tables (built into TT from IRS Pub 600) based on income & exemptions, You can then add major purchase sales tax to the table amounts. Neither is deductible if you use the standard deduction instead of itemizing.
In TurboTax, enter at:
Federal Taxes Tab (Personal for H&B version)
Deductions & Credits
-I'll choose what I work on
-Scroll down to:
--Estimates & other taxes paid
-Sales tax
If you paid sales tax on a motor vehicle at a rate higher than the general sales tax, in FL, you can deduct only the amount of the tax that you would have paid at the general sales tax rate.
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