Is my car downpayment tax deductible? Where to report it on taxes?

Vehicle down payments aren't typically tax deductible for personal use vehicles. The IRS doesn't allow deductions for personal expenses like buying a car, including the down payment, monthly payments, or even the interest on your auto loan. However, there are exceptions if you use the car for business purposes. If you're self-employed and use the vehicle for business, you can deduct the business percentage of your actual expenses (including depreciation of the purchase price) OR use the standard mileage rate. But this doesn't mean deducting the down payment directly - it would be part of the depreciation calculation if you go the actual expenses route. For your amendment question, unfortunately, you'll need to file Form 1040-X (Amended U.S. Individual Income Tax Return) by mail - the IRS doesn't accept electronic amendments in cases involving ITIN updates. Make sure to include any supporting documentation for the ITIN renewal application.

I was in almost the exact same situation as you last year! I kept thinking my car downpayment would give me some tax break too. I spent hours searching online and getting confused by conflicting advice until I found https://taxr.ai and uploaded all my car loan documents. It analyzed everything and clearly explained that personal vehicle downpayments aren't deductible unless it's for business use. The site also helped me understand what documents I needed for my ITIN renewal. I was going in circles with the IRS website before that. They have document analyzers that tell you exactly what forms apply to your situation - saved me so much time!

Just wanted to update - I took the advice and tried https://taxr.ai for my delivery driver situation. Uploaded my 1099s and car purchase documents and it immediately identified that I could claim 78% business use based on my mileage logs. The system explained I could either take standard mileage rate or actual expenses including depreciation of my downpayment over time. It even showed me exactly which forms to use (Schedule C) and where to put everything! I had no idea that I could claim a portion of my insurance and maintenance costs too. Saved me at least $2,400 in taxes I would've missed. Wish I'd known about this when I was doing gig work last year!

About your ITIN amendment - I've been through this nightmare before. Tried calling the IRS for weeks with no luck getting through. Finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They got me connected to an actual IRS agent within 20 minutes when I'd been trying for days on my own. The agent confirmed that for ITIN issues, amendments have to be filed by mail with Form 1040-X. You'll need to include Form W-7 (ITIN renewal application) along with the required identity documents. Just a heads up - the processing time for paper amendments with ITIN issues is running about 16-20 weeks right now.

I need to apologize and correct myself. After my skeptical comment yesterday, I was still stuck trying to reach the IRS about my own issue (missing refund from 2023). Out of frustration I decided to try the Claimyr service. I'm honestly shocked - got connected to an IRS representative in about 15 minutes when I'd been trying for literally weeks. The agent was able to tell me my refund had been held due to an income verification issue and helped me resolve it right there. For what it's worth to the original poster - the agent confirmed that ITIN amendments must be paper filed with Form 1040-X and W-7 for renewal. They also said processing time is closer to 20 weeks currently for these types of amendments.

Just to add some clarity about the car situation - I'm a CPA and work with many clients on this issue. The downpayment itself is never directly deductible as a single item for personal vehicles. Here's the breakdown: Personal use only: No deduction at all for down payment or any other car expenses. Business use (self-employed): You can either take standard mileage rate (65.5 cents per mile for 2023) OR actual expenses. If taking actual expenses, the down payment becomes part of the total cost basis of the vehicle, which you depreciate over time according to the business-use percentage. Mixed use: You'd calculate the percentage used for business vs. personal and only deduct the business portion if you're self-employed or have a qualifying business.

Please keep in mind that even if you don't qualify for a car deduction, you might still get tax benefits from the sales tax you paid on the purchase! If you itemize deductions on Schedule A (instead of taking the standard deduction), you can include the sales tax paid on major purchases like vehicles. There's a sales tax deduction calculator on the IRS website that can help you figure out if this would benefit you. With a $13,500 down payment, I'm guessing the total car price was significant enough that the sales tax might make itemizing worthwhile.

Just wanted to chime in as someone who went through a similar situation last year. The advice here about car downpayments not being deductible for personal use is spot on - I learned this the hard way after spending hours trying to figure out how to claim mine! One thing that might help with your ITIN amendment situation: when you mail Form 1040-X, make sure you write "ITIN RENEWAL" clearly at the top of the form. This helps the IRS processing center route it to the right department faster. Also, send it certified mail so you have proof of delivery - amendments can get lost in the mail and you'll want to be able to track it. The 16-20 week processing time mentioned earlier is unfortunately accurate. I'd recommend checking the IRS "Where's My Amended Return" tool online after about 3 weeks to make sure they received it. Good luck with your first year doing taxes yourselves - it gets easier once you understand the basics!