Although technically this deduction is still available to those that itemize it blocks the deduction for state income tax. You must itemize deductions and your sales tax deduction including the sales tax on the vehicle must exceed your state income tax.
Small Business Tax Deduction Tulley Automotive Group
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If you have not yet filed your 2015 taxes and you purchased a new car before january 1 2016 your acquisition may qualify for a deduction.
New car sales tax deduction 2016. To enter sales tax paid continue to the screen titled itemized. I bought a new car. Click itemized or standard deductions to expand the category and then click taxes paid.
However you can only claim this deduction if you do so instead of claiming a deduction for state income tax. If youre vehicle is energy efficient you may be eligible for a tax credit. To enter personal property tax or sales tax paid on a new vehicle.
If you itemize deductions on schedule a your total deduction for state and local income sales and property taxes is limited to a combined total deduction of 10000 5000 if married filing separately. I bought a new car in 2016 can i deduct sales tax i paid at time of purchase or interest on loan. Yes you can deduct sales tax if you itemize your deductions and are claiming a state sales tax deduction as opposed to a state income tax deduction.
Can i claim the taxes from this as personal property tax. 20 2017 is the last year that many taxpayers will be able to take advantage of the state and local sales tax deduction. From within your taxact return online or desktop click on the federal tabon smaller devices click the menu icon in the upper left hand corner then select federal.
There is a vehicle sales tax deduction but you will have to choose between taking this deduction or claiming your state income taxyou can deduct sales tax on a vehicle purchase but only the state and local sales tax. For example if your state imposes a general sales tax of 6 percent but a higher sales tax on cars of 8 percent you can deduct only 1200 in sales tax on a 20000 car not the full 1600 you paid. 31 also could give you a bigger sales tax deduction when you file your taxes next year.
This is particularly true for 2017 which thanks to the new tax law approved by congress on dec. Driving away in new wheels by dec. If your state has a significant income tax rate youd have tallied up a lot of sales taxes during the year to make this deduction worth your while.
Before 2010 car buyers could deduct the sales tax they paid when they bought a vehicle. The sales tax deduction works best for people who live in states with no income tax or whose sales tax deduction is larger than their state income tax deduction would be. The tax cuts and jobs act modified the deduction for state and local income sales and property taxes.
Realistically in most states with a state income tax the state income taxes would be higher than the state sales taxes. Sales tax can be a not so funny thing especially when.
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