How to Deduct a Car Registration on My Taxes

Car registration tax may be deductible when you file your income tax return.

When you buy a car, whether new or used, you must register it with your state within a certain period of time. You must renew the registration yearly. The laws relative to car registration vary from state to state. When you register a car, you pay a selection of fees, along with tax. In many states, the registration tax, or some portion of that tax, may be deducted when you file your personal income tax return. A tax professional is your best source of information regarding whether or how much of your car registration may be deducted.

Step 1

Look at your car registration bill. You may receive a bill via mail. You may also be able to access your bill online at the website of your state's vehicle licensing authority. In states such as Florida, your car registration card includes a breakdown of taxes and fees.

Step 2

Find the vehicle registration tax amount. in some states, the tax amount will be aptly named. In other states, the tax may be identified as a fee. In California, for example, the vehicle registration tax is termed the Vehicle License Fee, according to Internal Revenue Service Enrolled Agent John Moore.

Step 3

Check your state's tax agency website for general advice on what is deductible. In California, the Franchise Tax Board devotes a brief FAQ page to this issue. In Minnesota, the Minnesota Department of Revenue publishes an explanation of how much of the car registration tax is deductible.

Step 4

Talk to a tax professional up to date on recent tax law changes. A professional can offer the best advice on how much of your car registration can be deducted when you file your personal return.

Step 5

Enter the appropriate figure on Schedule A of your tax return. In California, for example, you can enter the entire Vehicle License Fee amount. In Minnesota, you deduct $35 from your vehicle registration tax and enter the resulting figure on Schedule A.

Tip

An appropriately credentialed tax professional may also be a CPA, an attorney or an IRS Enrolled Agent.

Warning

In states such as Ohio and Louisiana, you are not entitled to deduct any portion of vehicle registration when you file your personal tax return.

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