It's the portion of the taxes you paid that is based on the value of the vehicle and you would pay annually, and possibly sales tax. These would be itemizes deductions on Schedule A. If you normally take the Standard deduction, then it might not benefit you. (see below)
If you itemize deductions on Schedule A you can take a deduction for state and local income tax paid or state sales tax paid. You can compute the amount of sales tax by adding up your receipts for the year or by using a table provided by the IRS. In addition to this base amount you can deduct sales tax paid on large purchases such as a car, truck, boat, etc.
To get to the area to enter it: While inside the software and working on your return, type property taxes - auto in the Search at the top of the screen (you may see a magnifying glass there). There will be a popup that says Jump to property taxes - auto. Select that to get to the general area.
How does the itemized deduction differ from the standard deduction?
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