Income Tax Season Car Sales for Buick GMC in Sugar Land TX Area

The IRS permits you to deduct sales tax you paid on a purchase of a car by itemizing on Schedule A on Form 1040. If you choose not to itemize, you can't deduct sales tax. You are allowed to deduct this sales tax whether you buy from a private party or car dealership.

Disclaimer. Always consult an income tax specialist before taking deductions on your federal tax return.

You may deduct the sales tax whether it's charged on a new or used vehicle. Generally speaking, one can only make a tax deduction that is equal to what was paid when the vehicle was purchased by adding it to the Sales Tax Table for the appropriate state, and the registration fees, if your state bases the fee on the value of your car or truck. Those expenses are deductible only if itemized. In the specific case of sales tax, it is required to be higher than the state income tax that was paid.