[q1024]

What are the tricks/traps in deducting the hefty tax paid on a new car bought in 2007?
Thanks

[AtlantaTaxExpert]

You can add the sales tax for a car purchase to the sales taxes attributed to your salary level, but ONLY IF that combined figure exceeds the amount of state and local income taxes withheld from your pay.

[Mobea]

Unless you live in the state of Texas. Then you can deduct the sales tax paid on the car on Sch A

[AtlantaTaxExpert]

Agreed.

That also applies for Washington state, New Hampshire, Nevada, Florida, Tennessee and Alaska.

None of these states have state income taxes.

[q1024]

I do itemize & live in NY
how do I determine the "sales taxes attributed to your salary level"?
let say above is X
let say Y = state & local income tax withheld (or paid)
let say $1,200 = sales tax paid on new car in 2007
if (X+$1,200) > Y then $1,200 can go on to schedule A

if above is correct, then it would be conditional on earned wages (or taxable income)
please confirm

You can add the sales tax for a car purchase to the sales taxes attributed to your salary level, but ONLY IF that combined figure exceeds the amount of state and local income taxes withheld from your pay.

[AtlantaTaxExpert]

You add the $1,200 IN ADDITION to the other sales tax that is calculated based on your adjusted gross income.

[MukatA]

Personal property tax is deductible if it is a state or local tax that is:
*Charged on personal property,
*Based only on the value of the personal property, and
*Charged on a yearly basis, even if it is collected more or less than once a year.

A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways.

If the tax is partly based on value and partly based on other criteria, it may qualify in part.
Also you can deduct it as an itemized deduction on schedule A (Form 1040) line 7.

Publication 17: Your Individual Income tax, Chapter 22--Taxes; Personal Property Taxes

[AtlantaTaxExpert]

Agreed!

[q1024]

I am confused
Tax on personal property is ONE kind of sales tax
Does the agreement to quote below indicate that car sales can NOT be deducted since it is NOT charged on a yearly basis (as an **AND** condition)?
What are annually charges SALE tax that can be deducted if car sales tax is non-deductible?
Thanks

Personal property tax is deductible if it is a state or local tax that is:
*Charged on personal property,
*Based only on the value of the personal property, **AND**
*Charged on a yearly basis, even if it is collected more or less than once a year.

A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways.

If the tax is partly based on value and partly based on other criteria, it may qualify in part.
Also you can deduct it as an itemized deduction on schedule A (Form 1040) line 7.

Publication 17: Your Individual Income tax, Chapter 22--Taxes; Personal Property Taxes

[AtlantaTaxExpert]

Property taxes are paid on property you already OWN.

Sales taxes are paid on purchases.

THAT is why they are reported on different lines of the Schedule A.

[q1024]

I don't see the relevance of MUKATA's comments in the context of the deductibility of car sales tax.
I take that your statement below is valid
Thanks!

You add the $1,200 IN ADDITION to the other sales tax that is calculated based on your adjusted gross income.

[AtlantaTaxExpert]

Okay!