How Do You Deduct Sales Or Excise Tax On A New Car Or Pickup?
The Internal Revenue Service gives taxpayers the option to itemize their deductions or claim a standard deduction. Two of the itemized deductions taxpayers can claim if they forgo the standard deduction include deductions for state and local sales tax and state and local excise taxes. Only vehicles that are used for personal purposes can be deducted on your personal income tax. To claim the deduction, you must file your taxes using form 1040 and attach schedule A. Gather any receipts you have to document how much you paid in sales taxes or excise taxes on your new car or pickup. Mark the box next to 5b, “General Sales Tax,” on Schedule A to indicate that you are claiming the state and local sales tax deduction rather than the state and local income tax deduction. You may only claim one per year, not both. Write the amount of sales tax that you paid on line 5 of Schedule A. Write “Personal Property Tax” on line 8 of your Schedule A and write the amount of excise taxes you paid for the y
