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How does buying a car affect taxes?
I'm wondering if I can make any tax deductions with the purchase of my car. How does buying a car affect my taxes?
Matthew Macgugan · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Good question! You may be able to make tax deductions if you buy a car for personal or business use. The IRS permits you to deduct either local and state sales taxes or local and state income taxes, but not both.
Operation costs can also be tax deductions if you use the vehicle for business, charity, moving, or medical needs. Hybrid and electric vehicles also come with
separate tax credits
. If you aren’t sure about how to itemize your deductions, you may want to speak with a tax specialist when tax season rolls around. Until then, keep all of your sales documents safe!You can’t escape taxes any more than you can car insurance, but that doesn’t mean it has to break the bank. The
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app generates quotes from over 50 of the nation’s top providers, so you can get a great rate on your car insurance!Happy number crunching!
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