Submitted By: Jean
Answered: March 25, 2016 12:12 pm

I bought a new car. Can I deduct the sales tax?

It depends. First, you must itemize to do so. Then, you must choose to deduct state and local sales tax rather than state and local income taxes. If you make this choice, you can add the sales tax on the car to the amount of sales tax that the IRS allows for your household size and income.

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Tax Glossary

Statutory employees

Certain employees, such as full-time life insurance salespersons, who may report income and deductions on Schedule C, rather than on Schedule A as miscellaneous itemized deductions.

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