Question

Sales Tax Deduction on Major Purchase (New Vehicle)

Forum|Forum|4 years ago
February 2, 2022
1 reply
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I live in Texas, no state Income Tax. The Sales Tax in my county is 6.25% + additional county specific fees that taxes that make Sales Tax 8.25%. Sales Tax on Vehicle was just 6.25% I am using Turbo Tax and Itemize deductions. I received a Sales Tax deduction of Approximately $1300 based on income. When I enter the Major Purchase of vehicle (Price $46,400) Sales tax 6.25% Turbo tax states that I cannot deduct this tax because 6.25% is less than the Sales TAx claimed for income (8.25%). This does not seem correct. Am I doing something wrong?

TurboTax Home & Biz Windows

DMarkM1

You are correct, you should be able to include the actual sales taxes paid on a major purchase even if the rate is different. Re-check your entries for the "Major Purchase."

In the boxes for the "Major Purchase" verify you have entered the purchase price excluding sales taxes, then the amount of sales taxes paid (which should equal the purchase price X .0625) and then the 6.25%.

If the amount of sales taxes paid from your bill of sale do not work out to purchase price x .0625, then you can divide the sales taxes paid by the purchase price to get the percent that works.

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