vehicle reg deduction 2021?

[tleibold1]

Got the veh. reg deduction in 2020 but not allowed in 2021? 

[Opus 17]

You can't deduct registration fees unless part of the fee represents a tax based on the value of the vehicle, and if that is the case, you can only deduct that part of the fee.  You can't deduct fees for plates, your title, or the privilege of driving on state roads. 

What state do you live in?  Does your state charge a value-based tax as part of the registration fee?  Maybe your state law changed between 2020 and 2021, or maybe you weren't actually allowed to claim the fee last year. 

[RaifH]

Yes, vehicle registration fees are still allowable in 2021. The portion of your vehicle registration fee which is based on the value of your car can be entered into TurboTax. This TurboTax article shows which states have deductible car registration fees. If you are from one of the states that have deductible vehicle registration fees, enter it into TurboTax by:

1. Click on the Search and type in "vehicle registration" and click on the Jump To link.
2. Answer Yes to Did you pay any car registration fees in 2021?
3. Type in your vehicle make and model and the deductible portion of the vehicle registration fee. If you have more than one vehicle, enter each on a separate row.

Even once you have entered your Vehicle Registration, you may not see an impact on your tax return. If that is the case, the TurboTax system has calculated that you get a better result from taking the standard deduction rather than itemizing your deductions which includes your vehicle registration fee, as well as mortgage interest, property taxes, and other deductions.

[tleibold1]

Yes I was allowed the deduction in 2020. shows on the turbo tax results. This year it's zero? I live in Iowa and vehicle reg. is deductable. In 2020tax year I got a deduction allowance. 

Still not sure why? 

Got any suggestions

Thanks =- Tom

[RaifH]

There are two possibilities for why you are not getting a deduction for 2021 if you entered your vehicle registration fees:

• You have already maxed out the state and local tax deduction

You are limited to a $10,000 deduction on your federal income tax return for state and local taxes. In addition to your vehicle registration fee, this would include any real estate taxes as well as state income tax.

• You are not itemizing deductions

The vehicle registration fee is an itemized deduction. If the TurboTax software determines that you have a more favorable tax outcome using the standard deduction, it will not use the itemized deductions, and therefore your vehicle registration fee will not lower your taxes. For more information on standard or itemized deductions, please see this article.