Business & Finance Taxes

How to Deduct Car Taxes From Federal Taxes

By Business & Finance Last updated Monday, May/20/2024

1). Download the "Itemized Deductions" form (Schedule A) from the Internal Revenue Service website.
2). Check the box indicating you wish to deduct general sales tax paid. If you check the box to deduct income tax paid, you cannot deduct car taxes. In 2009, this option was 5b.
3). Total the amount of sales tax you paid during the previous calendar year based on all sales receipts. Include the sales tax paid on your car in addition to sales tax paid on clothes, electronics and other purchases.
4). Enter the total amount of sales tax on Schedule A next to the box you checked.
5). Complete the remainder of Schedule A and file it with Form 1040 and any other tax forms that apply to your situation. Consult an accountant or the IRS if you need assistance.