You'll need to sign in or create an account to connect with an expert.
Generally, the tax paid on purchase is a sales tax and may be
deductible under some circumstances. You can deduct sales tax on a new
or used purchased or leased vehicle or boat but, if you live in a state
with a state income tax, it probably isn't to your advantage to do so.
To claim sales taxes on a vehicle or boat you need to meet two
criteria. You must itemize deductions, and your sales tax deduction,
including the sales tax on the vehicle must exceed your state income
tax.
Realistically, in most states with a state income tax, the
state income taxes would be higher than the state sales taxes, even with
sales tax on a car added.
If you claim the standard deduction, you cannot deduct sales taxes.
The deduction for sales tax is under the deductions and credits tab. Go to:
Deductions and Credits
Note: for an auto, the tax rate doesn't need to be the same as the general tax rate. For a boat, it does.
Understand because I am taking the standard deduction, I cannot deduct the sales tax.
It is true that you could not deduct the sales tax on the federal return if you take the standard deduction. However, state laws vary a lot, and there are states that allow you to itemize on the state return even if you took the standard deduction on the federal return. This is why we often encourage taxpayers to enter their itemized deductions, because if they can be used at the state level, then TurboTax transfers the amounts from the federal return.
What state are you in?
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
pottermelanie12
New Member
danielleksandlin
New Member
JeanAtkinson
Level 3
yamoinca
Level 2
rodriguerex
Level 1
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.