SharonD007
Expert Alumni

Deductions & credits

Yes, purchasing a car through financing is considered a major purchase. Refer to the TurboTax article How do you define "major purchase" or "major item" for the sales tax deduction? When you live in a state that you pay sales taxes and the sales taxes that you paid are more than the state income tax that you paid, it may be more beneficial for you to use the sales taxes as the SALT deduction.  The most you can deduct is $5,000 if you use Married Filing Separately (MFS) filing status.  For all other filing statuses, the cap is $10,000 for the State and Local Tax (SALT) deduction.

 

For more information, review the TurboTax article Which deduction should I choose, state and local income tax or sales tax?

 

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