Is there a vehicle sales tax deduction? Can I deduct sales tax on a vehicle purchase?
There is a vehicle sales tax deduction but you will have to choose between taking this deduction or claiming your state income tax. You can deduct sales tax on a vehicle purchase, but only the state and local sales tax. However, you can only claim this deduction if you do so instead of claiming a deduction for state income tax. You’ll only want to do this if you paid more in state and local sales tax than you paid in state income tax.
If you deduct sales tax, you can either:
- Save sales receipts and deduct actual sales taxes paid.
- Use the IRS sales tax tables to figure your deduction. These tables calculate the estimated sales tax you paid based on your income. They don’t include large purchases. So, to the amount in the table, you can add the sales tax you paid on any of these:
- Motor homes
See the Form 1040 instructions for the tables.
Do you have unreimbursed expenses to include on your tax return? Learn how to claim unreimbursed employee expenses with IRS Form 2106.
Do you know what your tax filing status is? Learn how to determine and check your tax filing status with H&R Block.
Tax season is right around the corner! Consider how the withholding allowances claimed on your Form W-4 could affect your income tax refund by visiting the Tax Information Center blog.
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.