Q. Do I NEED to claim tax from car purchase?
A. No. You are not required to enter that on your tax return.
Standard deduction vs itemized .Everybody is allowed a $13,850 standard deduction ($27,700 married), from income, before tax is calculated.
Alternatively, taxpayers are allowed to itemize deductions (mortgage interest, medical expenses, charity donations and state-local taxes paid). If your itemized deductions, including sales tax, don't add up to more that $13,850, you don't need to bother entering all that info.
The purchase of a personal vehicle is not usually a tax reportable event. However, You are allowed to deduct state & local income taxes OR sales tax; but not both. This provision was added primarily to allow a deduction for people in states without income tax. Sometimes, with a big purchase (like a car), you may be better off deducting sales tax even if your state has an income tax. Enter both, under deductions, and TT will calculate the best option. If you don't have all your receipts (and hardly anybody does), you are allowed to use tables (built into TT from IRS Pub 600) based on income & exemptions, You can then add major purchase sales tax to the table amounts. Neither is deductible if you use the standard deduction instead of itemizing.
In TurboTax, enter at:
Federal Taxes Tab (Personal for H&B version)
Deductions & Credits
-Scroll down to:
--Estimates & other taxes paid
-Sales tax
