astoney93
New Member

I live in salem ma is my sales tax auto purchase deductible? And if so where would I add it?

 

Deductions & credits

See this TurboTax support FAQ for entering the sales tax paid on a car purchase - https://ttlc.intuit.com/community/entering-importing/help/where-do-i-enter-the-sales-tax-on-my-car/0...

rjs
Level 15
Level 15

Deductions & credits

The deductibility of sales tax is somewhat complicated. First of all, you can deduct either sales tax or state and local income tax, but not both. Living in Massachusetts you probably pay a good bit of state income tax, so even with the purchase of a car, the state income tax that you paid in 2020 might be more than your total sales tax deduction. If so, you would deduct the state income tax rather than the sales tax.


Secondly, your total itemized deduction for all state and local taxes is limited to a maximum of $10,000 ($5,000 if married filing separately). The maximum applies to the total of real estate tax, personal property tax, and either state and local income tax or state and local sales tax. So depending on how much real estate tax and personal property tax you pay, you could be limited to the maximum deduction even without the sales tax on the car.


Finally, state and local taxes, including sales tax, are an itemized deduction. They will not make any difference in your tax or your refund unless your total itemized deductions are more than your standard deduction. The standard deduction amounts were increased significantly starting in 2018. Only about 10% of taxpayers have itemized deductions that exceed their standard deduction.


See the following FAQ for more information about the sales tax deduction.


Can I claim the sales tax deduction?

 

rjs
Level 15
Level 15

Deductions & credits

You don't have to figure out all the considerations yourself. The simple approach is to enter the sales tax on the car, following the instructions that DoninGA gave you, and enter whatever other itemized deductions you have. TurboTax will figure out what deduction is best for you.