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timmc2727
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Can I write off vehicle sales tax from vehicle I purchased this past year in the state of Pennsylvania?

 
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2 Replies

Can I write off vehicle sales tax from vehicle I purchased this past year in the state of Pennsylvania?

 

SALES TAX

You can enter the sales tax you paid for the car you purchased in 2020 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.  If your state has a state income tax, you have to choose between using the deduction for your state tax paid OR the sales tax deduction, whichever is higher.  The TT process will suggest one or the other as you prepare your return.

“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

 

 

Since sales tax is an itemized deduction, remember that it only affects your refund or tax due if you have enough other itemized deductions to exceed your standard deduction.

**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 write off vehicle sales tax from vehicle I purchased this past year in the state of Pennsylvania?

You can deduct state income tax, or state sales tax, but not both.  In most cases, the income tax will be larger.   For the sales tax deduction, you can either claim the exact amount you paid (if you kept records) or you can deduct a standard amount based on your income.  You are allowed to add tax paid on a vehicle to the standard amount.  TurboTax may not ask you about the sales tax deduction if it calculates that the income tax deduction is larger, but if not, you can manually go to that section of the interview on the Deductions and Credits page.  Even if you manually enter the car sales tax though, TurboTax will automatically deduct your state income tax if it is the larger deduction.  

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