Can I deduct taxes on used car purchase that I made in 2017 when I file taxes?
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:
- Light truck
- Motor home
- Off-road vehicle
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 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.
As end-of-year approaches, taxes owed can become a major headache. Plan ahead by considering 529 Tax Deductions and other end-of-year savings options.
Learn more about keeping tax records with the experts at H&R Block.
Is your personal property tax deductible? Learn more from the tax experts at H&R Block.
Do you need to get an EIN for your small business? Learn more about the EIN application process and get tax answers at H&R Block.