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I purchased a car towards the end of the year. I put down a down payment and made a few payments towards it. How do I calculate how much to put on the deductions section?
Would I take each of my payments during 2019 and calculate the approximate sales tax from that?
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Deductions & credits
When you purchase a vehicle, sales tax is paid up front. So your down-payment AND sales tax would have been paid when your first bought your vehicle. Your paperwork should show your sales taxes paid.
That said, unless you itemize your deductions on Schedule A, you won't be allowed to deduct those sales taxes. Because the standard deduction has been increased at the end of 2018, many more people are using the standard deduction.
If you have further questions, please post back.
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Deductions & credits
Ah okay. So just to confirm. The sales tax is based on the initial purchase. So even though I haven't fully paid off the car yet, I would put down the sales tax of the full transaction?
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Deductions & credits
As @Kat noted, the sales tax may be deductible if you itemize. However, interest on auto loans or payments are never deductible. Sales tax may have been included in financing if you financed the full amount of the purchase, but it would be disclosed separately in a purchase agreement.
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Yes, the full amount.
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