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ATF
Level 1

Sales Tax Deduction for Leased Car - Personal Use

I have a few questions regarding sales tax deduction for leased car used for personal use, to start I am filing using itemized deductions.

I started a new car lease at the end of 2020, would I include ALL sales tax that I paid and will pay in the future in this year deduction or only for the months I paid sales tax with my lease payment?  Also, are there any other sales tax deductions I would include in this 2020 tax filing, cap cost reduction tax?

I did have 2 other leased vehicles in 2020 but the leases started in prior years, would I deduct the sales tax from those payments as well?

Thank you in advance!

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1 Best answer

Accepted Solutions
ToddL99
Expert Alumni

Sales Tax Deduction for Leased Car - Personal Use

If the monthly lease invoices specifically include a sales tax amount, then you can deduct that amount in the year it is paid. This also applies to cars leased in prior years.

 

This would not count as a "major purchase", so you'd have to calculate your sales tax deduction using the "Enter All My Receipts" function, not the Easy Guide.

 

See the following screenshot for aid in navigation.

 

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1 Reply
ToddL99
Expert Alumni

Sales Tax Deduction for Leased Car - Personal Use

If the monthly lease invoices specifically include a sales tax amount, then you can deduct that amount in the year it is paid. This also applies to cars leased in prior years.

 

This would not count as a "major purchase", so you'd have to calculate your sales tax deduction using the "Enter All My Receipts" function, not the Easy Guide.

 

See the following screenshot for aid in navigation.

 

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