Itemized/Standard Deduction

Is the sales tax I paid on my car purchase deductible ?

Taxpayers have an option for this write-off. It is claimed primarily for those who live in states that do not impose an income tax. You must choose between deducting state and local income taxes or state and local sales taxes. For most citizens of income tax states, the income tax is a bigger paid amount than the sales tax, so the income-tax deduction is a better deal. The IRS has tables that show how much residents of various states can deduct, based on their income and state and local sales tax rates. But if you purchased a vehicle, boat or airplane, you get to add the sales tax you paid to the amount shown in the IRS table for your state. Taxpayers can elect to deduct state and local general sales taxes, instead of state and local income taxes, as an itemized deduction on Schedule A (Form 1040), Itemized Deductions.

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