Beaumont Dodge Tax Season Car Sales

The Internal Revenue Service permits a deduction on sales tax for a car purchase on Form 1040, Schedule A. Unless you itemize, you can’t deduct sales tax. You may deduct the tax whether you purchase from a private party or car dealer.

Disclaimer. Consult an income tax adviser before taking deductions on your taxes related to a car or truck.

Yes. You are able to deduct the sales tax whether it is charged on a used or new vehicle. You can only deduct the sales tax that is equal to what was paid when you purchased the car by adding it to the Sales Tax Table amount for the appropriate state, along with the registration fees paid, if the state bases the fee upon the value of the car or truck. Those expenses are deductible if itemized only. In the case of sales tax, it needs to be higher than the state income tax that you paid.