Question

Can I deduct taxes on used car purchase that I made in 2017 when I file taxes?

Answer

No. You cannot deduct sales tax on a used car. However, you can deduct state and local sales and excise taxes you paid on the purchase of a new:

  • Car
  • Light truck
  • Motor home
  • Motorcycle
  • Off-road vehicle
  • Boat
  • Aircraft

The deduction is currently available on new vehicles bought in 2017. If the sales tax on these types of vehicles is higher than the general sales tax rate, you can only deduct sales tax up to the general sales tax rate. You can deduct either of these:

  • State and local sales taxes, including those paid on these:
    • New vehicle
    • Home
    • Home improvements
  • State and local income taxes

However, you can’t deduct both.

If you 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. You can find the tables in the Form 1040 instructions or use the IRS calculator.

Related Topics

Related Resources

Tax Deductions for Young Adults — Plus Tax Credits & More!

As a young adult, or millennial, you might be new to the tax game. Here are tax deductions for young adults -- plus some tax credits too -- so you can...

I have a question about claiming charitable contributions. I’m a college student and my parents’ dependent. Can I clai

Is claiming charitable contributions possible if you're a dependent? Learn more from the tax experts at H&R Block.

I am itemizing my tax return. Do I need to be concerned about medical deduction limits?

Discover the medical deduction limits with advice from the tax experts at H&R Block.

Deduct Employee Business Expenses

Need help determining which employee business expenses are deductible? Learn about common business deductions and get tax answers at H&R Block.