Taxes on car

[Pacun]

Client is coming tomorrow and said that she bought a new personal car on Jan 4, 2010. She paid the taxes on Jan 04, 2010 also. I believe you have to buy the car in 2009 and pay taxes in 2010 in order to get a little break in 2010, correct?

[ILLMAS]

I believe that is correct, however you can itemize them on Sch A.

[Gloria]

Client is coming tomorrow and said that she bought a new personal car on Jan 4, 2010. She paid the taxes on Jan 04, 2010 also. I believe you have to buy the car in 2009 and pay taxes in 2010 in order to get a little break in 2010, correct?

According to the tax forms, the purchase of the vehicle needs to be between 2/16/09 and Before 1/1/2010.

[Tax Prep by Deb]

According to the tax forms, the purchase of the vehicle needs to be between 2/16/09 and Before 1/1/2010.

Last year we had the ability to claim the sales tax on a new vehicle through schedule L, to use schedule L this year your dates are correct.

Last year we had the ability to claim the sales tax on a separate line on schedule A. To use that same line this year your dates are correct.

In the past and is true again this year we can deduct sales tax paid on a vehicle purchased in 2010 on the line for State Tax deduction (Schedule A, sales tax deduction worksheet). Just use the bunny hop feature to open the worksheet, scroll down towards the bottom and you will see a spot to enter sales tax for certain purchases.

So the difference this year is that last year you could deduct it even if you didn't itemize, this year you must itemize, and then it is the better of state taxes paid or the sales tax deduction.

Hope this helps,

Deb!