Will buying a new car effect my taxes?
By Cars & Motorcycles on Apr 24, 2009 with Comments 6
Corey W asked: I bought a new car in Jan of 2008, will i have to file it for this coming tax return? and if so, where does it go?
Filed Under: Buying New Car
About the Author:
Nope, it wont
most new car purchasers pay state tax on the sale, which should be reported as tax paid. you may increase your refund.
I helped craft the tax laws.
Depends… if you own a business, you may be eligible for deductions. If it was a hybrid, you may be eligible for deductions. Normally you pay sales tax at the time of purchase. Some states require you to pay a yearly personal property tax, but that does not usually get filed with your federal & state tax returns.
You only get a tax credit if it is a Hybrid car.
I can think of the following scenarios where there might be an effect:
1) you plan to deduct the sales tax
(this is not ideal in most cases)
or
2) use it for your business
or
3) you bought one of those new hybrid thingies which might be able to
Otherwise the purchase of your car has no effect to your taxes. Only the registration fees may be deductible if you itemize.
The only time purchasing a car would affect your tax return is if it was used for business or you were itemizing. If you were using the long form and itemizing you could claim the sales tax paid on the vehicle.
Christine EA Master Tax Adviser
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This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you have provided.