If I bought a used car in 2012, can I deduct the sales tax I paid on it?
Yes, if you choose to. You can either deduct:
- State and local sales taxes, including those paid on a used or new car
- State and local income taxes
You can’t deduct both.
If you choose to deduct sales taxes, you can either:
- Save sales receipts and deduct actual sales taxes paid.
- Use the IRS’s sales tax tables to figure the deduction. See Form 1040 instructions for the tables.
By deducting actual taxes or using the IRS tables, you can deduct sales taxes paid for:
- Cars
- Boats
- Other vehicles
You’ll deduct the tax up to the amount that would have been imposed at the general sales tax rate.
Most Popular Tax Questions
This advice is for general information purposes only and may not apply to you. Every tax situation is different. This is not intended to be legal advice. Taxpayers should consult an H&R Block Tax Professional regarding their individual tax situation.