Where do I enter car sales tax?

[msethn]

I'm not getting an option anywhere to deduct the sales tax from a vehicle purchase I made last year.

[rosaarp]

How do i enter my sales tax deductions

[yasmeen-kearney]

What form is it on

[Fern · Accepted solution]

Sales tax paid can be included in the calculation of itemized deductions.  However, you can include state sales tax paid or you can include state income tax, you cannot take both.

If you had a major purchase you should see if the sales tax deduction is greater than the state income tax deduction.

You can calculate your state sales tax by saving all receipts for the year and manually adding the sales tax paid.  Or, you can use a calculation based on your income level.  If you use the calculation, you are able to add sales tax for major purchases to the calculated amount.

If you live in a state with no income tax, you will always want to calculate the sales tax deduction.

State income tax paid is calculated by adding state tax withheld from your W-2, any estimated state tax paid during the year and any amount paid when you filed your prior year state tax return.

To enter sales tax in Turbo Tax:

Select Federal Taxes
Select Deductions and Credits
Select Show More at Estimates and Other Taxes Paid
Select Start at Sales Tax

The Turbo Tax program will calculate which method gives you the most benefit.

[TomD8]

Another option you can use to calculate your sales tax deduction is the IRS Sales Tax Deduction Calculator.  With the IRS calculator, you enter a vehicle sales tax on the "Specified Items" line.  If you decide to use the IRS calculator numbers in Turbotax, be sure you delete any previous sales tax entries you may have made.

Here's a link to the IRS calculator:

http://apps.irs.gov/app/stdc/