Car Purchase and Tuition Reimbursement

[JPerry135]

Good Morning.

I recently bought my car in cash. I am in the state of New York. I was wondering if I can input that purchase into my taxes this year, and if so where I can locate that in the TurboTax tabs.

I also participated in school through my employer's tuition reimbursement program and received a 1098-T to put into TurboTax. After entering the information, the return I would get from Federal shot up from $5 to $400 even though I was reimbursed already. I entered the information exactly as shown from the 1098-T as directed from TurboTax. Please let me know if this is normal.

Thank you for any help provided.

Best,

Jonathan

[MindyB]

First, the car you purchased is not a deduction, but the sales tax could be. ‌In the sales tax section, choose  Easy Guide  and tell the software about the car purchase on the page Enter Major Purchases.

Here's how you can navigate to the sales tax entry in TurboTax Online:

1. Navigate to Federal > Deductions & Credits > Estimates and Other Taxes Paid > Sales Tax > Start or Revisit

If you're itemizing, you must choose between deducting your state and local income taxes or your state and local sales taxes. You can't claim both.

Next, for the 1098-T, since you were reimbursed by your employer (and if you were not taxed on the reimbursement because it was less than $5,250), you can elect not to enter the 1098-T.  Alternatively, you can enter the amount received as reimbursement in the 1098-T section. ‌Continue through the 1098-T entry until you arrive at Scholarships and Financial Aid. ‌

Note, your refund may increase if you received reimbursement in excess of the tax-free amount ($5,250 in 2024) as those expenses would be allowed. If that is the case, only enter $5,250 in the box for Employer-Provided Assistance.

[JPerry135]

Hi Mindy,

Thank you for the response.

I work from home in the state of New York. The workplace is in Oklahoma. Do I file my W-2 for boxes 15-17 under New York or Oklahoma?

Also for the state taxes section, am I filing for both states with Oklahoma non-resident and New York resident?

Thank you,

Jonathan

[BrittanyS]

Can you clarify if your W-2 shows taxes being paid to Oklahoma or New York?

[JPerry135]

Hi,

Sorry about that. My W-2 shows taxes being paid to New York.

[Opus 17]

Car:  As a practical matter, no.

You can deduct state income tax OR state and local sales tax, not both.  If you deduct sales tax, you can deduct all the sales tax you can prove with receipts including the car.  Or, you can use the optional standard method where the IRS gives you a deduction based on your income and location.  You can add a motor vehicle to the optional method.  BUT, New York's income taxes are likely higher than any sales tax deduction you qualify for, so as a practical matter, there is no point in trying for the sales tax deduction.  (You can try, but it likely won't help.)

[Opus 17]

---

@JPerry135 wrote:

Hi Mindy,

Thank you for the response.

I work from home in the state of New York. The workplace is in Oklahoma. Do I file my W-2 for boxes 15-17 under New York or Oklahoma?

Also for the state taxes section, am I filing for both states with Oklahoma non-resident and New York resident?

Thank you,

Jonathan

---

You file a state tax return in the state of your permanent residence that reports and pays tax on all your world-wide income, no matter where the source of the income is located.  In this case, you pay NY income tax (regardless of what was withheld).

Oklahoma would only require you to pay income tax as a non-resident if you had OK-sourced income.  Wages are NOT sourced to where the company is located, but where you perform the work.   That means that you would only owe OK income tax if, for example, you traveled to OK 2 weeks a year for training.  In that case you would report 2/52nds of your income as OK-sourced income on a non-resident return. 

[JPerry135]

Hi,

Thank you for your response. I appreciate the help.

Best,

Jonathan

[JPerry135]

Hi,

Thank you for your help. I really appreciate this response.

Best,

Jonathan