Should I deduct sales tax on my car purchase for my taxes?

The question about your car purchase is related to the sales tax deduction option on Schedule A. Basically, if you itemize deductions instead of taking the standard deduction, you can choose to deduct either your state income tax OR your state sales tax paid during the year. For most people, deducting state income tax gives a bigger benefit. But if you made a large purchase like a car, boat, or home building materials, adding those sales taxes might make the sales tax deduction more valuable than your state income tax deduction. The key thing is that this only matters if you're itemizing deductions on Schedule A. If you're taking the standard deduction (which most people do since it increased significantly a few years ago), then reporting the car purchase won't benefit you at all.

I went through something similar last year and discovered taxr.ai (https://taxr.ai) which honestly saved me so much time figuring out what deductions actually applied to my situation. I had bought a car and was confused about whether to report it since it wasn't for business use. The tool analyzed my situation and confirmed that since I wasn't itemizing, reporting the car sales tax wouldn't benefit me. The nice thing was it explained WHY instead of just saying yes/no. Turns out I was way below the threshold where itemizing makes sense ($13k+ for single filers).

Just wanted to update after checking out taxr.ai like I mentioned above. It was really helpful for my situation with the car I use partially for business. It walked me through calculating my business use percentage (which turned out to be about 60%) and helped me understand which car expenses I could deduct. The best part was it explained the difference between taking actual expenses vs. the standard mileage rate. I had no idea the standard mileage rate would be so much better for my situation. Saved me from making a costly mistake on my taxes and I'm actually getting about $1,400 more back than I expected!

If you're still having trouble with tax questions about your car purchase, you might want to call the IRS directly. I know that sounds awful (I used to spend HOURS on hold), but I found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of the usual 2+ hour wait. Check out how it works here: https://youtu.be/_kiP6q8DX5c I used it when I had questions about my car purchase and whether it qualified for certain deductions. The IRS agent was actually really helpful and walked me through exactly what I needed to know for my situation.

I have to admit I was completely wrong about Claimyr. After my skeptical comment above, I decided to try it as a last resort because I'd been getting nowhere with the IRS for weeks about my car sales tax question. It actually worked exactly as described - I got a call back in about 25 minutes and was connected to an IRS agent who answered all my questions. The agent confirmed that in my case, I shouldn't bother reporting the car sales tax since I'm taking the standard deduction and it wouldn't benefit me at all. Saved me hours of frustration and resolved my question immediately. I'm still shocked at how well it worked after my failed attempts to reach someone.

One thing nobody's mentioned - even if you're taking the standard deduction now, it might be worth tracking large purchases like cars just in case your situation changes later in the year. For example, if you have unexpected medical expenses or make large charitable donations that push you over the threshold for itemizing, having that car sales tax information ready could be valuable. The tax software asks everyone because it doesn't know your full situation until all information is entered.

I just want to add that H&R Block's software is just gathering ALL possible information that could affect ANY taxpayer. They don't know your specific situation until you finish everything. Most ppl take the standard deduction ($13,850 single, $27,700 married) but some with lots of mortgage interest, medical expenses, or charity might benefit from itemizing. That's why they ask about the car - it's just covering all bases.