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New Member
posted Feb 3, 2023 1:39:21 PM

I'm not 100% sure on what car registration fees are. Like if I make care payments monthly, does that count?

I have a car loan of about $16,000 after interest is added. I'm not really sure is that is tax deductible or not.

0 3 1547
3 Replies
Expert Alumni
Feb 3, 2023 1:55:44 PM

Registration fees are paid to the state as a form of state or local tax for registering the vehicle. Some fees are flat per vehicle, and are non-deductible fees, but part of them may be a tax per $100 value of the the vehicle, and may be deductible if you are using an itemized deduction.  TurboTax will ask the questions to determine if entering the registration fees will improve your refund. It will depend if you itemize your deductions. You will enter the information in the federal portion of the return and if you have a state return, it will pull the information from the federal.

 

  1. To enter your registration fees, please click on the Federal Taxes 
  2. Then select, Deductions and Credits
  3. You may see a prompt for your registration fees, but if not,
  4. Click All Tax Breaks and See All
  5. Scroll down to Cars and Other Things You Own 
  6. Click on Show More 
    Select Start for Car Registration Fees 

click here for information deducting car registration fees

Level 15
Feb 3, 2023 2:04:19 PM

The only car fees, they’re deductible are taxes that are based on the value of the car.  For example, if registration is a flat fee of $80 per vehicle, nothing is deductible.  The first time you register your car in your state, you might be required to pay flat registration fee per vehicle plus an additional fee based on the value of the car. That is a deductible tax. Or, you might pay an annual tax based on the value of the car.  In my state, I pay a personal property tax for my car, which consist of a small flat fee, plus a large tax based on the value which goes up or down as the bluebook value changes. The flat fee is not deductible, but the tax based on the value is deductible.

 

not all vehicle registration fees are counted as deductible. Taxes, depends on your state, and what you actually pay. There may be a blue link on the TurboTax page that says “what does this mean”? Or “show me more details” which will explain things in more detail.

 

separately, you may pay sales tax when you purchase a new vehicle, or one that is new to you.   

when you itemize your deductions, you can deduct sales tax or state income tax, but not both. Then, if you pay a separate tax based on the value of the car, that may be added to your tax deductions, whether or not you deduct sales tax or income tax.

 

Level 15
Feb 3, 2023 6:33:52 PM

if you are self-employed and use the car in your self-employment, a portion of the interest would be deductible if you use actual vehicle expenses method based on business mileage to total mileage. otherwise, it's non- deductible personal interest.