Before I bought my car the salesman stated that I could deduct the sales tax I paid on it. Where would this go on my 1040? Do I have to itemize my deductions to claim this deduction? It was only like $1850 and I really dont have too many other deductions. If, so I guess I am better off taking the standard deduction.
Thanks.
2007-02-15 08:05:14 · 6 answers · asked by Eric 2 in Business & Finance ➔ Taxes ➔ United States
I live in Texas, thus we have no state/local income tax, but I am going to be hard pressed to come up with $5000 in deductions.
2007-02-16 00:48:08 · update #1
It is reported on the Schedule A as an itemized deduction on Line 5, if you are itemizing you have a choice to claim State and Local Income Tax or Sales Tax but not both. If you are taking the Standard Deduction rather than Itemizing then you would not be able to claim the Sale Tax.
Publication 600
http://www.irs.gov/pub/irs-pdf/p600.pdf
2007-02-15 08:25:14 · answer #1 · answered by Anonymous · 2⤊ 0⤋
IF you itemize, and IF you take the sales tax deduction instead of taking state and local income taxes paid, and IF you use the sales tax table for your tax amount rather than actual receipts, then yes, you could add the sales tax paid on your car to the amount on the table.
If you don't have enough eligible expenses to itemize, or if you live in a state with state income tax so that's probably a higher amount than sales tax, then the sales tax on the car would not help you.
The car salesman left out a couple things there, didn't he. What a surprise.
2007-02-15 16:17:58 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
In order to claim the sales tax deduction, you must itemize, which means your itemized deductions must be greater than your standard deduction in order for you to get any benefit from it. It is reported on Schedule A in the "taxes" section.
2007-02-15 08:12:11 · answer #3 · answered by jseah114 6 · 0⤊ 1⤋
I've never heard of claiming sales tax on a luxury like a car on your taxes.
You might check with someone who knows more about how the IRS works - but it doesn't sound feasible.
2007-02-15 08:11:07 · answer #4 · answered by joemammysbigguns 4 · 0⤊ 3⤋
Is your car a hybrid is my understanding that only certain type of cars can be deducted
Here is the list
http://www.irs.gov/newsroom/article/0,,id=157632,00.html
2007-02-15 08:26:21 · answer #5 · answered by Nita 2 · 0⤊ 2⤋
sales tax is not deductible.
2007-02-15 08:12:21 · answer #6 · answered by Jack Chedeville 6 · 0⤊ 3⤋