How to handle a car loan when filing taxes on TurboTax?

This makes sense, but what if I don't remember exactly how much sales tax I paid? Is there a way to find this info if I don't have the paperwork anymore? Also, does the interest I'm paying on the car loan count as part of the purchase price?

You can find the sales tax information on your purchase agreement, loan documents, or vehicle registration paperwork. If you can't locate those, try calling the dealership where you purchased the car - they should have records. If all else fails, you can calculate an estimate by finding your state's vehicle sales tax rate and multiplying it by the purchase price. The interest you pay on your car loan is not part of the purchase price for tax purposes. The purchase price is just the actual cost of the vehicle before financing. Interest on personal car loans is not tax deductible, unfortunately. Only the sales tax might be deductible if you itemize rather than take the standard deduction.

Does it actually work with all the car paperwork? I have like 20 pages of documents from my dealership and I'm not sure what's relevant for taxes. Can it tell the difference between what matters and what doesn't?

I'm skeptical about these tax tools. How does it handle the sales tax deduction question? Because that depends on whether you itemize or take the standard deduction, right? No tool can really know what's best for your specific situation.

It works surprisingly well with all the car paperwork! You just snap photos or upload PDFs of everything you have, and it automatically identifies the relevant tax info like purchase price, sales tax, and registration fees from all those pages. It highlighted the exact numbers I needed for TurboTax, which saved me tons of time digging through paperwork. For the sales tax deduction question, it actually analyzes your overall tax situation. It looks at your income, other potential deductions, and does the calculation to tell you whether itemizing (to claim the car sales tax) would be better than the standard deduction in your specific case. In my situation, it showed me that the standard deduction was still better, so I didn't need to worry about entering the car info for deduction purposes.

How does this actually work? Do you have to pay them just to call the IRS for you? Couldn't you just call yourself and put your phone on speaker while you do other stuff?

This sounds like a complete waste of money. I've called the IRS before and yeah, sometimes the wait is long, but paying someone else to wait on hold? Really? And how would an IRS agent even know the specifics of how to enter something in TurboTax anyway? They deal with tax law, not software tutorials.

The service works by using their system to navigate the IRS phone tree and wait on hold for you. When an agent picks up, you get a call and are connected immediately. You don't have to keep your phone tied up or stay next to it listening for someone to answer. IRS agents actually can be incredibly helpful with tax questions beyond just the law. When I got connected, the agent walked me through exactly what counts as part of the purchase price versus what's considered loan interest. They clarified that vehicle sales tax can be deducted if you itemize, and explained the documentation I needed to keep. They won't know TurboTax specifically, but they know what information needs to be reported where on your actual tax forms, which is what matters.

Oh that's interesting! I do some gig delivery driving on weekends for extra cash. Does that count? How do I track mileage properly? Should I be keeping gas receipts too?

Yes, your gig delivery driving absolutely counts as business use! For tracking mileage, I recommend using an app like MileIQ or Everlance that automatically logs your trips. Start tracking immediately if you haven't been - better late than never. For tax purposes, you have two options: the standard mileage deduction (58.5 cents per mile for 2025) or actual expenses. Most people find the standard mileage rate easier and often more beneficial. If you go this route, you don't need gas receipts, but keep records of mileage, dates, and business purpose. If you choose actual expenses, then yes, keep all receipts for gas, maintenance, insurance, and loan interest. Either way, you can only deduct the business percentage of these expenses, so accurate mileage tracking is essential.

While I agree that the sales tax question only matters if you're itemizing, I think it's still worth answering correctly in case TurboTax determines itemizing would be better for you. The software compares both options, and a large purchase like a car with significant sales tax might tip the scales toward itemizing being more beneficial, especially if you have other potential deductions.