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wendyv89
New Member

I bought a new car, can I claim the taxes that i paid?

 
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3 Replies
MollsBBU
New Member

I bought a new car, can I claim the taxes that i paid?

Yes, when you input the information, TurboTax will calculate the best option for you so all guess work is eliminated. One may only deduct either sales tax or income tax, whichever is higher. So, deducting sales tax is usually only a benefit for someone who resides in a state that does not charge an income tax.  

Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming don't levy an income tax.

However, depending on your specific tax situation, either could be most beneficial. You may enter the sales taxes paid on major items and TurboTax will see if that outweighs the alternative deduction (income taxes).

To enter sales tax in to TurboTax:

  1. Click the Federal Taxes tab at the top 
    Or the Personal tab if using Home & Business
  2. Then, Deductions & Credits
    Desktop users may need to click I'll choose what I work on here
  3. Scroll down to the "Estimates and Other Taxes Paid section"
    Online users may need to click Show more to expand this section
  4. Next to "Sales Tax" click Start/Update/Revisit
  5. Follow the interview screens to input this information

For more information on which deduction is right for you, please see this TurboTax FAQ: https://ttlc.intuit.com/questions/1901222-should-i-deduct-sales-taxes-or-state-income-taxes?jump_to=...

 

Or, you may be able to deduct certain taxes for the fees you pay for your vehicle registration or vehicle license.
Please note these must be based on your vehicle's value.

To browse the list of states that charge deductible vehicle fees, please see  this post .

To enter Car Registration Fees/Personal Property Taxes, if your state allows:

  1. Click the Federal Taxes tab at the top 
    Or the Personal tab if using Home & Business
  2. Then, Deductions & Credits
    Desktop users may need to click I'll choose what I work on here
  3. In the "Cars and Other Things You Own" section
    Online users may need to click Show more to expand this section
  4. Next to "Car registration fees", click Start/Update/Revisit
  5. Then, follow the interview screens from there
Jumpjet20
New Member

I bought a new car, can I claim the taxes that i paid?

Where in this program do I put the taxes I paid when I bought my new car?

VictoriaD75
Expert Alumni

I bought a new car, can I claim the taxes that i paid?

If you are trying to take the deduction for sales tax, you must choose between income taxes paid and sales tax. You cannot deduct both. If you live in a state where you have an income tax, that is generally the most beneficial deduction for you. State and local tax deductions (including real estate) are capped at $10,000.

 

To take the sales tax deduction:

  • From the Federal menu, Choose Deductions & Credits
  • Expand the menu for Estimates and Other Taxes Paid
  • Click Start/Revisit next to Sales Tax
  • Choose to try the sales tax deduction and click EasyGuide on the next screen
  • Choose your state.
  • Enter the tax rate for your location. Click Continue.
  • Answer Yes to the question Did you buy any major items.
  • On the following screen, enter the requested information and include the sales tax paid for the purchase of your vehicle

Keep in mind, these deductions are part of itemized deductions and will only affect your return if you are itemizing. 

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