Deductions, deductions, and plenty of confusion!?

Question

1) I bought a new car in 06 for personal use. Four months later (still in 06) I was involved in a wreck (not at fault).
Can I deduct...
A) The sales tax and other miscellaneous taxes on my car when I purchased it? (Conflicting info..one person says yes, another says no because it isn't for business only)
B) Out-of-pocket expenses for rental fees? Or taxes only?
C) Standard depreciation?
D) Extra depreciation due to the wreck?
E) Deductible paid to body shop but not re-imbursement from insurance company not received by the end of 06.

2) Student loans. I was not a student in 2006, but was making payments on my student loans.
Can I claim..
A) Interest paid on student loans?
B) Interest paid but not claimed from previous tax years? How do I claim this if I can?
C) Hope credit or Lifetime Learning Credit?

Answer 1

Sales tax on your car purchase - if you itemize, you can choose whether to deduct sales tax, or state and local taxes. If you deduct sales tax, there's a table for your state of allowable amounts if you don't save and add up all your receipts. You can add sales tax paid on your car to the table amount. If you don't itemize, you can't take a deduction for this.

Out of pocket expenses for rental fees, no. Taxes on that, only if you are deducting sales tax (see paragraph above) and you saved all your receipts from the year and add them up - if you take the amount in the table, plus the tax on your car purchase of course, then no, you can't take the tax on the car rental.

Standard depreciation would only apply if you had bought the car for use in your business, Since you said it's for personal use, then no, you can't take a deduction for depreciation, either standard or extra for the wreck.

Non-reimbursed deductible - yes, if you itemize, you can claim that as a casualty loss, subject to certain limitations, if you don't know whether you'll get reimbursed or not. If you claim it and do get reimbursed though, the reimbursement will be taxable income, so if you're pretty sure you're going to get reimbursed, probably not worth doing.

Student loan interest from the current year - yes, can be claimed as an adjustment even if you don't itemize. From previous years but not claimed - no, you can't take it this year, but you can amend the previous years.

You aren't eligible for Hope or Lifetime Learning credits except in years when you pay tuition and fees to an eligible institution for eligible education.

Answer 2

1)
A) Yes, if you itemize and choose to deduct your state sales tax instead of your state income tax.
B) No. No.
C) No. (Depreciation deduction not allowed on personal items)
D) No. see C)
E) Maybe. Casualty losses are also an itemized deduction but you also must subtract 10% of your income and $100. So, unless the deductable was a few thousand dollars, probably not.

2)
A) Yes
B) Amend previous years returns using 1040X
C) Yes, if you are still paying tuition and going to school.