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Can I deduct sales tax on a new car?

Can I deduct  sales tax on a new car in Pennsylvania?
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4 Replies

Can I deduct sales tax on a new car?

SALES TAX

You can enter the sales tax you paid for the car you purchased in 2023 by going to Federal>Deductions and Credits>Estimates and Other Taxes Paid> Sales Tax.  You will be asked if you paid sales tax on a major purchase, and you will be able to enter the sales tax you paid for your new vehicle. 

 

Sales tax is an itemized deduction. “Major purchases” that you can enter for the sales tax deduction include:

Motor Vehicles (cars, trucks, motor homes, RV’s, sport utility vehicles and off-road vehicles

Aircraft or boats

Mobile homes

Manufactured housing

Building materials for major home improvements

You cannot deduct: furniture, jewelry, home electronics such as TV’s or computers

https://ttlc.intuit.com/questions/1901222-which-deduction-should-i-choose-sales-tax-or-income-tax

https://ttlc.intuit.com/questions/2566624-how-much-sales-tax-did-i-pay-last-year

https://ttlc.intuit.com/questions/3148443-how-do-you-define-major-purchase-or-major-item-for-the-sal...

https://ttlc.intuit.com/questions/1900791-how-do-i-find-my-local-sales-tax

https://ttlc.intuit.com/questions/2566624-how-much-sales-tax-did-i-pay-last-year

 

 

States with no sales tax:  Alaska, Delaware, Montana, New Hampshire and Oregon

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Can I deduct sales tax on a new car?

The information provided by xmasbaby0 is correct. To be clear, you can only deduct sales tax or state income tax but not both. Turbo Tax will provide an estimate of the sales tax you paid in general based on your reported income but doesn't take into account big ticket items such as your car. The estimate will be increased by the sales tax paid on the car.

Can I deduct sales tax on a new car?

I think I answered no to the question about making major purchases the first time through.  When I went back to enter the tax paid on I could not find the question about "make a major purchase".  So I can't determine how to get credit for the $3000+ sales tax paid when the car was purchased.

KrisD15
Expert Alumni

Can I deduct sales tax on a new car?

You do need to select "Easy Guide" first for entering Sales Tax and the program should ask about major purchases. 

 

Go to Deductions & Credits

Estimates and Other Taxes Paid

Sales Tax   START or UPDATE

 

Continue through the screen that says "Let's Compare Your Sales Tax and Income Tax" if that shows first

Select "EasyGuide"

Select EDIT if you have an entry or start a new one

Continue through the interview and you should get to a "Major Purchases" screen 

Select "Yes"

Be sure the sales tax rate matches the sales tax (State and Local) that you previously entered. 

 

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