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mooreco456
New Member

I purchased a car last January. I got a car loan. how do i input that into my taxes?

 
1 Best answer

Accepted Solutions
bwa
Alumni
Alumni

I purchased a car last January. I got a car loan. how do i input that into my taxes?

There is no specific tax advantage to purchasing a new personal use auto.  There are some potential benefits, however.  They include:

  • Personal property taxes are deductible on your taxes if your state imposes one.  A personal property tax is an annual tax based on value.  In some states they are part of your annual registration, in other states they are billed separately by the county (as in South Carolina) and in other states there is no personal property tax on automobiles (as in Florida which taxes autos based on weight, not value.)
  • Sales tax paid may be deductible, but this is usually only a benefit in states that do not have a state income tax as only the higher of the two is deductible.
  • If it’s an all-electric or plug-in hybrid vehicle it may be eligible for an energy tax credit. 

Interest on a personal auto is not deductible.  Personal property taxes and sales taxes are only deductible if it is to your advantage to itemize deductions (i.e., your itemized deductions are greater than your standard deduction.)

In Turbotax,

  • For personal property taxes select Cars and Other Things you Own, then Personal Property Taxes.
  • For energy credits on vehicles select Cars and Other Things you Own, then Energy-Efficient Vehicles
  • For sales taxes, select Estimates and Other Taxes Paid, then select Sales Tax.


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2 Replies
bwa
Alumni
Alumni

I purchased a car last January. I got a car loan. how do i input that into my taxes?

There is no specific tax advantage to purchasing a new personal use auto.  There are some potential benefits, however.  They include:

  • Personal property taxes are deductible on your taxes if your state imposes one.  A personal property tax is an annual tax based on value.  In some states they are part of your annual registration, in other states they are billed separately by the county (as in South Carolina) and in other states there is no personal property tax on automobiles (as in Florida which taxes autos based on weight, not value.)
  • Sales tax paid may be deductible, but this is usually only a benefit in states that do not have a state income tax as only the higher of the two is deductible.
  • If it’s an all-electric or plug-in hybrid vehicle it may be eligible for an energy tax credit. 

Interest on a personal auto is not deductible.  Personal property taxes and sales taxes are only deductible if it is to your advantage to itemize deductions (i.e., your itemized deductions are greater than your standard deduction.)

In Turbotax,

  • For personal property taxes select Cars and Other Things you Own, then Personal Property Taxes.
  • For energy credits on vehicles select Cars and Other Things you Own, then Energy-Efficient Vehicles
  • For sales taxes, select Estimates and Other Taxes Paid, then select Sales Tax.


mooreco456
New Member

I purchased a car last January. I got a car loan. how do i input that into my taxes?

Thank you!
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