Question

If I bought a used vehicle this year. Are there any used car tax deductions available?

Answer

 

There are not used car tax deductions available. If you choose to take the standard deduction you cannot deduct the tax. However, if you itemize your return you may be able to deduct the sales tax you paid on the vehicle. In order to do so you can only deduct state and local sales taxes instead of income taxes on Form 1040, Schedule A.

You can deduct the tax you pay on personal property — like cars and boats. Personal property tax — also called an excise tax — is based on the value of the item.

To deduct property taxes, all of these must apply:

The tax is imposed on personal property.

The tax must be based on the value of the personal property

The tax is imposed on an annual basis, even if collected more or less than once per year.

Because you will be excluded from taking the standard deduction if you choose to deduct the tax you paid on personal property you should calculate both methods – the standard deduction or itemization – to determine which is best for you.

 

Related Topics

Related Resources

Life Change Checklist: The Top Things To Do After Getting Married

Before filing taxes as a married couple, there are several things you should look into. Here's a checklist from H&R Block to make sure you don't miss anything.

Maximum Income To Deduct Student Loan Interest

What's the maximum income you can have and still deduct student loan interest? Learn the answer from the tax experts at H&R Block.

EIC Separated from Spouse

Learn whether you can claim the earned income tax credit if you are separated from your spouse with advice from the tax experts at H&R Block.

Amend Your Return To Correct Filing Status

Did you use the wrong filing status by mistake? Discover how to amend your filing status. Learn more from the tax experts at H&R Block.