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February 18, 2023
Question

Can you deduct ad valorem tax on car tag

  • February 18, 2023
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February 18, 2023

Your car registration is deductible if it’s a yearly fee based on the value of your vehicle and you itemize your deductions.  If you take the standard deduction (most people do), you will not see a tax deduction for this fee.  If you do itemize, you will enter it in the section "Cars and Other Things You Own" in Deductions & Credits and will see it as part of your property tax deductions on Schedule A. 

 

If the total of all of your state taxes exceeds $10,000, entering more won't increase the deduction. You may see this explanation appear: "You have now maxed out the federal $10,000 deduction for itemized state and local taxes. Any entries over the $10,000 limit won't impact your federal tax outcome, but may still benefit you on your state tax return. We'll include them automatically if this applies to you."

 

You can’t deduct the total amount you paid, only the portion of the fee that’s based on your vehicle’s value.  And, not all states have value-based registration fees. The states that do are listed at the links below, along with the deductible portion of your registration fee.

 

States with deductible car registration fees and which portion you're allowed to claim

States where you claim personal property tax in lieu of vehicle registration fees

Where you can find your car registration fees:

 

You can preview your return before filing to find out how your taxes were calculated. See here for details. 

 

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