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kap791
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Can I deduct taxes paid on a new car? Can I deduct the registration? the title fees, lien fees?

Can I deduct the registration fees paid to Maryland for my Car?
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3 Replies

Can I deduct taxes paid on a new car? Can I deduct the registration? the title fees, lien fees?

You are posting from the Free Edition which does not support itemizing deductions.  Are you going to upgrade to Deluxe or higher and enter itemized deductions like mortgage interest, etc.?  If not, the sales tax or registration will have no effect at all.

 

SALES TAX

You can enter the sales tax you paid for the car you purchased in 2022 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

 

 

 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/car-registration-...

**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 taxes paid on a new car? Can I deduct the registration? the title fees, lien fees?

Title and lien fees are never deductible.  Sales tax is deductible if you itemize your deductions and if you choose to deduct sales tax instead of state income tax.  Registration fees may be deductible if a part of the registration fee is based on the value of the car. Any part of the registration fee that is simply to get a license plate or to get permission to drive on state roads is not deductible, but if there is a value tax included in the registration fee, the value tax may be deductible.

Can I deduct taxes paid on a new car? Can I deduct the registration? the title fees, lien fees?

Sales taxes ... YES if you itemize and use the sales tax deduction instead of the usually higher state taxes

 

Registration, title fee, lien fees ... only the registration fee is considered personal property taxes and only some state have it ...   be aware that  the section for all taxes is limited to a maximum of $10K. 

 

The fee you had to pay for the license plate that is based on the value of your car is the car registration fee.

 

Only the following states charge a fee based on the vehicle value:

 

Alabama
Arizona
Arkansas
California
Colorado
Iowa
Indiana
Kentucky
Louisiana
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
South Carolina
Washington
Wyoming

 

 

To be deductible, an auto registration fee must be based on the value of your car and assessed annually. If the plate fee is not based on the value of the car and assessed annually, then it is not deductible.

 

Please read this TurboTax article for more information.

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