There are 2 separate types of fees that may be deductible on your federal income tax return; sales
tax and your car registration fees. They could
both be listed on your new car purchase invoice or you may need to contact your
state's Department of Motor Vehicles for a breakdown of your car registration
fee information.
Please note that you
would only be able to claim these deductions if you itemize so if all your itemized deductions are less than your standard deduction, TurboTax will choose the larger standard deduction on your tax return.
Car Registration Fee - the total amount
of your registration fee is not deductible, just the portion that the state
charged you for taxes based on the value of your vehicle.
To enter your car registration fees in TurboTax
Online or Desktop, please follow these steps:
- Once you are in your tax
return, click on the “Federal Taxes” tab ("Personal" tab in
TurboTax Home & Business)
- Next click on “Deductions
& Credits”
- Next click on "jump to
full list" or “I’ll choose what I work on”
- Scroll down the screen until
to come to the section “Cars and other things I own”
- Choose "show more",
then car registration fees and follow the onscreen instructions
Sales Tax Deduction - You have the choice to
deduct the general sales tax for your state or the sales tax for all your major
purchases. TurboTax will guide you in determining which of these provides you
will the larger deduction.
To enter your sales taxes in TurboTax Online or
Desktop, please follow these steps:
- Once you are in your tax
return, click on the “Federal Taxes” tab ("Personal" tab in
TurboTax Home & Business)
- Next click on “Deductions
& Credits”
- Next click on "jump to
full list" or “I’ll choose what I work on”
- Scroll down the screen until
to come to the section “Estimates and Other Taxes Paid ”
- Choose "show more",
then Sales Tax (start/update/revisit)
- Choose - continue to sales
tax and have the program guide you (this will help the TurboTax program
determine if taking a general sales tax or individual sales tax is better
for your situation (screenshot #1)
Arizona does not specifically have a state tax adjustment for the sale's taxes and deductible registration fees on it's states tax return. TurboTax will guide you in entering your state tax information
