Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
Phillip99
New Member

Why can't I deduct the sales tax I paid on my new car?

Do I have to itemize to take the sales tax deduction? I'm putting in my new car purchase into Turbotax, and Turbotax tells me "Based on what you've told us, the sales tax deduction will give you the maximum refund on your taxes this year." But my refund amount doesn't change, and then in later steps it ends up telling me that the standard deduction is best for me. Why can't I deduct the sales tax I paid on my new car?

1 Best answer

Accepted Solutions
MinhT
Expert Alumni

Why can't I deduct the sales tax I paid on my new car?

The sales tax deduction is an itemized deduction on Schedule A. On Schedule A, you can either deduct sales tax or state tax. As your sales tax is higher than your state tax, TurboTax recommended that you choose sales tax instead of state tax, hence the first message.

However, as the total of your itemized deductions is smaller than your standard deduction, you are better off using the standard deduction. You did not get the benefit of your sales tax deduction but using the standard deduction will give you a larger tax break.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

2 Replies
MinhT
Expert Alumni

Why can't I deduct the sales tax I paid on my new car?

The sales tax deduction is an itemized deduction on Schedule A. On Schedule A, you can either deduct sales tax or state tax. As your sales tax is higher than your state tax, TurboTax recommended that you choose sales tax instead of state tax, hence the first message.

However, as the total of your itemized deductions is smaller than your standard deduction, you are better off using the standard deduction. You did not get the benefit of your sales tax deduction but using the standard deduction will give you a larger tax break.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Phillip99
New Member

Why can't I deduct the sales tax I paid on my new car?

Thank you for the thorough explanation. It was very helpful!
Dynamic AdsDynamic Ads
Privacy Settings
v