Sales tax on a new car, paid cash is this tax deductible?
I purchased a new 2006 Toyota, Avalon for $29750.00 cash in July 2006. The question is the sales tax, tax deductiable, for the year of 2006
For your Federal income tax return, you can deduct either state and local income taxes, or state and local sales tax, on Schedule A. The sales tax of a vehicle will be added to the normal amounts of state and local sales tax from IRS tables.
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December 29th, 2006 at 5:27 pm
It all depends on what state you bought the car in. Some states have an income tax as well as a sales tax, and the federal form usually lets you deduct the income tax in those states, but not the sales tax. Check with your own state's revenue department.
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December 29th, 2006 at 5:35 pm
For your Federal income tax return, you can deduct either state and local income taxes, or state and local sales tax, on Schedule A. The sales tax of a vehicle will be added to the normal amounts of state and local sales tax from IRS tables.
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December 29th, 2006 at 5:39 pm
No, not unless you bought the car for your business.
However, if the car is PARTLY used for business purposes, then PART of the sales tax will be deductible as business expense.
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Business experience.
December 29th, 2006 at 7:07 pm
Under the federal tax rules, if you live in a state with no income tax, you can deduct your sales taxes. If you live in a state with income tax, you can choose to deduct either your state income taxes OR your sales taxes. You choose one or the other, you cannot deduct both.
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