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

Oh that makes so much sense! I've always just taken the standard deduction because my mortgage interest and other deductions never add up to enough to itemize. So basically H&R Block is asking everyone this question just in case they're itemizers? Do you know roughly how much in itemized deductions someone would need to make it worthwhile to track all this stuff like car sales tax?

The software asks everyone this question because it's trying to find every possible deduction that might benefit you. For the standard deduction question - if you're single, you'd need more than $13,850 in itemized deductions to make itemizing worthwhile. For most people, the main itemized deductions are mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and medical expenses (only the portion exceeding 7.5% of your AGI). Without significant mortgage interest or very large charitable donations, it's tough for many people to exceed the standard deduction threshold.

Does that service actually handle complicated tax situations? I bought a car AND a boat last year, plus I have rental property income. Would it work for someone with multiple income streams and more complex deduction scenarios?

I'm kinda skeptical of these tax tools. How does it actually determine if the standard deduction is better? Like does it just do the math or does it actually look at your specific tax situation? I'm worried about missing something important.

It's surprisingly good with complex situations. The system does a detailed analysis comparing potential itemized deductions against the standard deduction based on your specific documents. It evaluates everything from vehicle purchases to rental income and gives you a side-by-side comparison. For your skepticism question - it's not just doing basic math. The tool examines your complete tax picture including all income sources, potential deductions, and special situations. It's designed to catch opportunities you might miss and provides explanations for why certain choices are better for your specific situation.

Wait, how does this actually work? The IRS literally never answers their phone - I've tried calling like 5 times and always get the "call volume too high" message and it hangs up. Does this service somehow keep calling until it gets through?

Yeah right. No way this actually works. The IRS is impossible to reach these days. I've been trying for MONTHS to get someone on the phone about my missing refund. I'm calling BS on this one.

The service basically uses an automated system that navigates the IRS phone tree and waits on hold for you. Instead of you personally waiting for hours, their system does the waiting and then calls you when it connects with a live agent. It saves you from having to redial or sit through all the hold music and messages. Regarding the skepticism - I totally get it because I felt the same way. I had been trying to reach someone at the IRS for weeks about a notice I received. What convinced me was their guarantee that if they don't connect you, you don't pay. I figured I had nothing to lose by trying, and it actually worked. Got connected to an agent who resolved my issue in about 5 minutes once I got through.

What kind of records should we keep specifically? Just the final sales paperwork or are there other documents that are important for tax purposes?

You should keep the purchase agreement that shows the price of the vehicle and a clear breakdown of the sales tax paid. Also keep any documentation of registration fees, though these are typically only deductible if they're based on the value of the vehicle rather than a flat fee. If you paid cash, keep bank statements showing the withdrawal. If you financed, keep the loan agreement and records of payments. Also hang onto any receipts for major repairs or improvements, especially if there's any chance you might use the vehicle partially for business in the future.

I used both this year (started with H&R then switched to TurboTax) and they handle it pretty much the same way. Both ask about large purchases to check if sales tax itemization would benefit you. TurboTax maybe explains it a bit clearer but the end result was identical for me.