Tax deduction???

Question

Can a big purchase item such as a car or a boat, or the interest paid on the loan used to purchase it, be used as a tax deduction?

Answer 1

No, those are not tax deductible on an Individual Tax Return. You may be able to deduct or depreciate assests used in your business, though. If you're an ordinary wage earner, there is no deduction for those.

If you itemize deductions, you may take a deduction for State Income Taxes paid OR State Sales Taxes paid. You should take whichever one gives you the larger deduction. If you opt for the State Sales Tax deduction, you must use the table for your state and income but you may add on the sales tax for big-ticket purchases such as a car, boat, RV or major appliance.

You can also deduct the interest on a home mortgage but NOT the interest on other financed purchases such as a car, boat, etc. or credit card interest.

Answer 2

The only way it can be deducted is if it is used in a business. Then, if it is, you can depreciate it and take the depreciation as a deduction, not the interest. When calculating the depreciation, the IRS has something called Section 179 that allows you to take a large part of the depreciation in the first year (up to $112,000). Any depreciation deduction will be reduced if you use the property for personal use.

However, what you can deduct is the sales tax paid on the transaction. The IRS inacted a new law that allows taxpayers to deduct state sales tax paid and if you are itemizing your deductions already, I would take advantage of that.

Answer 3

If self-employed or have your own business you can deduct large ticket items (there's a formula though--not sure how to use it). Such a deduction would however raise red flags in the audit dept.

You can deduct state taxes on large ticket items if you itemize (vs taking the standard)--but not the interest.

Answer 4

Interest, no. But if you are itemizing, you have a choice of deducting state and local income taxes, or sales tax. There's a table by state by income by family size giving you an amount you can deduct for sales tax if you don't save all your receipts and add them up - if you are using the table amount, you can add to it the sales tax paid on a car, boat or plane.

Answer 5

i'm not sure you recognize purely what a reimbursement is. for the duration of the year you have money withheld out of your paycheck for federal income tax. on the top of the year, you practice a style stated as a tax return to calculate how plenty tax you owe complete for the year, and evaluate that to what grow to be withheld. in case you had greater withheld than your complete tax, you get the greater lower back as a reimbursement. in case you probably did no longer have sufficient withheld, you need to pay something quite than getting a reimbursement. a reimbursement isn't some sort of bonus the government supplies for working. that's like in case you went to WalMart and acquired $sixteen worth of things, yet gave the cashier a $20 bill. you will get a "refund" of $4, even though that's not them providing you with some thing, that's purely getting your person money lower back. You paid in $sixteen.87 for federal withholding. You did no longer make sufficient to owe any taxes. so as that's what you will get lower back. certainly, considering you're allowed to around to the closest greenback, you will get $17 lower back - yet i'm particular the greater thirteen cents isn't what you have been asking approximately. There are a pair credit that persons can get that they did no longer pay in, yet you're no longer eligible for those. you need to the two be a minimum of age 25, or have a based baby.

Answer 6

Be sure to donate to charity for your tax deductions. Explore http://www.charityboats.org/. This organization accepts collectibles, all different vehicles, real estate, even aircraft. Take advantage of tax deductible donations for a worthy cause. It benefits both you and the needy.

Answer 7

No, those r not tax deductable. you will get a choice of deducting state and local income taxes,ifyou r itemizing
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Answer 8

Not unless they have some sort of business purpose