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We had to buy a new car last year - what are the tax implications of this?

car was stolen. do we get a sales tax break or a vehicle license fee deduction?
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We had to buy a new car last year - what are the tax implications of this?

Casualty losses and theft are not deductible on your federal return since the tax laws changed for 2018 and beyond, so sorry--you cannot get a tax break for a stolen car.  Hopefully you had insurance.

 

As for the sales tax on the car, if you are itemizing deductions like mortgage interest, etc. you can include sales tax as an itemized deduction.

 

 

SALES TAX

You can enter the sales tax you paid for the car you purchased in 2023 by going to Federal>Deductions and Credits>Estimates and Other Taxes Paid> Sales Tax.  You will be asked if you paid sales tax on a major purchase, and you will be able to enter the sales tax you paid for your new vehicle. 

 

Sales tax is an itemized deduction.  Unless you have enough other itemized deductions to exceed your standard deduction the sales tax will have no effect on your tax due or refund.

 

“Major purchases” that you can enter for the sales tax deduction include:

Motor Vehicles (cars, trucks, motor homes, RV’s, sport utility vehicles and off-road vehicles

Aircraft or boats

Mobile homes

Manufactured housing

Building materials for major home improvements

You cannot deduct: furniture, jewelry, home electronics such as TV’s or computers

 

https://ttlc.intuit.com/questions/1901222-which-deduction-should-i-choose-sales-tax-or-income-tax

https://ttlc.intuit.com/questions/2566624-how-much-sales-tax-did-i-pay-last-year

https://ttlc.intuit.com/questions/3148443-how-do-you-define-major-purchase-or-major-item-for-the-sal...

https://ttlc.intuit.com/questions/1900791-how-do-i-find-my-local-sales-tax

https://ttlc.intuit.com/questions/2566624-how-much-sales-tax-did-i-pay-last-year

 

 

States with no sales tax:  Alaska, Delaware, Montana, New Hampshire and Oregon

 

 

 

 

 

Federal>Deductions and Credits>Cars and Other Things You Own>Car Registration Fees

 

 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/car-registration-...

 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/car-registration-...

 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
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