Some states don't have income taxes to deduct, so the IRS allows you to
deduct either sales taxes OR state & local income taxes (but not both). For
residents of most states, it's usually best to deduct income taxes, except when
you have a large purchase subject to sales tax, like you. Instead of keeping
track of every little thing you bought, You're allowed to deduct an amount from
an IRS table (based on income & number of dependents). You are then allowed
to add the sales tax on certain large purchases (cars being one of em) to the
table amounts. TT will do all of this for you.
To enter it, type> sales tax deduction <in the find box. Then "jump to". Follow the instructions for Sales Tax.
For the sales tax actually paid, on the car, you are allowed to deduct the
lower of sales tax actually paid or the sales tax you would have paid in your
local county. For example if you paid 7% in Ohio on a $30,000 purchase ($2100)
but your local & state tax rate, in
MI, is only 6%, you would only be allowed to deduct $1800 (plus the
amount from the IRS table). TurboTax handles all this.
