Tax help please! IA educator who purchased a new car in NE edition.
June 18, 2020 5:12 PM Subscribe
I bought a new (used) car from a Nebraska dealership last October and registered it in Iowa where I live. I am filing my taxes, and H&R Block is suggesting that as an educator I can get a tax deduction on the "vehicle tax." What do I deduct given the wonky wording on my receipts, and is this only valid if I itemize?
The NE dealership sales receipt says N/A under sales tax. The IA registration receipt has three different line items: Title Fee, Fee for New Reg, and Registration Fees. I also have a separate New Plate document with its own fees but they are quite small in total.
I do not itemize. I am an educator; I work in higher education as a faculty member.
H&R Block didn't ask me this as a part of an itemizing section, it asked me as a part of an educator-specific deduction section so I am currently under the impression it will count for me even if I don't itemize. Is that true, and if so, what do I input? I called the dealership and they said just the Registration Fees amount from the registration receipt, which are a couple hundred. A friend said for their new vehicle in a different state they input the sales tax which was in the four figures, which mine would be as well if I input the Fee for New Reg or it in addition to any of the other numbers. I don't know what specific IRS form lines H&R Block is attempting to fill out; it has just one field with description and another with value for this "vehicle tax" section.
In a separate section, H&R Block is asking me how much sales tax I paid on the vehicle to see if it's greater or less than my state and local income taxes. What number would I input for the sales tax?
The Iowa tax site says: "If you itemize deductions, a portion of the automobile or multipurpose vehicle annual registration fee you paid in 2019 may be deducted as personal property tax on your Iowa Schedule A, line 6, and federal form 1040, Schedule A, line 5c. This deduction includes annual registration fees paid based on the value of qualifying automobiles and multipurpose vehicles. Multipurpose vehicles are defined as motor vehicles designed to carry not more than 10 people, and constructed either on a truck chassis or with special features for occasional off-road operation [Iowa Code section 321.1(44)].Annual registration fees on the following vehicles are not deductible: pickups (model year 2009 or older), motor trucks, work vans, ambulances, hearses, non-passenger-carrying vans, campers, motorcycles, or motor bikes. This deduction applies only to the annual vehicle registration fee. It does not apply to the 5% one-time registration fee/fee for new registration that is imposed on the initial registration of a vehicle. That 5% fee is only deductible on the IA 1040, Schedule A, line 4b if the taxpayer claimed an itemized deduction for general sales taxes paid on the federal form 1040, Schedule A, line 5a."
H&R Block's help link says, "You can usually deduct these:
Personal property or vehicle excise tax
Registration or license fee
Ad valorem tax
However, you usually can't deduct a vehicle tax or fee if either:
All vehicle owners pay the same amount
The fee is set according to the vehicle's weight"
Thank you for any advice you can give!
The NE dealership sales receipt says N/A under sales tax. The IA registration receipt has three different line items: Title Fee, Fee for New Reg, and Registration Fees. I also have a separate New Plate document with its own fees but they are quite small in total.
I do not itemize. I am an educator; I work in higher education as a faculty member.
H&R Block didn't ask me this as a part of an itemizing section, it asked me as a part of an educator-specific deduction section so I am currently under the impression it will count for me even if I don't itemize. Is that true, and if so, what do I input? I called the dealership and they said just the Registration Fees amount from the registration receipt, which are a couple hundred. A friend said for their new vehicle in a different state they input the sales tax which was in the four figures, which mine would be as well if I input the Fee for New Reg or it in addition to any of the other numbers. I don't know what specific IRS form lines H&R Block is attempting to fill out; it has just one field with description and another with value for this "vehicle tax" section.
In a separate section, H&R Block is asking me how much sales tax I paid on the vehicle to see if it's greater or less than my state and local income taxes. What number would I input for the sales tax?
The Iowa tax site says: "If you itemize deductions, a portion of the automobile or multipurpose vehicle annual registration fee you paid in 2019 may be deducted as personal property tax on your Iowa Schedule A, line 6, and federal form 1040, Schedule A, line 5c. This deduction includes annual registration fees paid based on the value of qualifying automobiles and multipurpose vehicles. Multipurpose vehicles are defined as motor vehicles designed to carry not more than 10 people, and constructed either on a truck chassis or with special features for occasional off-road operation [Iowa Code section 321.1(44)].Annual registration fees on the following vehicles are not deductible: pickups (model year 2009 or older), motor trucks, work vans, ambulances, hearses, non-passenger-carrying vans, campers, motorcycles, or motor bikes. This deduction applies only to the annual vehicle registration fee. It does not apply to the 5% one-time registration fee/fee for new registration that is imposed on the initial registration of a vehicle. That 5% fee is only deductible on the IA 1040, Schedule A, line 4b if the taxpayer claimed an itemized deduction for general sales taxes paid on the federal form 1040, Schedule A, line 5a."
H&R Block's help link says, "You can usually deduct these:
Personal property or vehicle excise tax
Registration or license fee
Ad valorem tax
However, you usually can't deduct a vehicle tax or fee if either:
All vehicle owners pay the same amount
The fee is set according to the vehicle's weight"
Thank you for any advice you can give!
Response by poster: OK, yes, I think I finally figured out what it wanted (Registration Fees minus weight calculation for the first part, Fee for New Reg for the second part) but in the end it was trying to itemize and so later on told me it wasn't worth it compared to the standard (which I knew, I just thought it was saying that because I am an educator it was a separate deduction) so I don't know why they put me through all that "educator" nonsense since it didn't matter. Maybe just some bad UI.
Thanks for taking a look, How much is that froggie in the window.
posted by vegartanipla at 9:19 PM on June 18, 2020
Thanks for taking a look, How much is that froggie in the window.
posted by vegartanipla at 9:19 PM on June 18, 2020
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Note that with SALT deductions you would normally itemise the greater of sales tax paid over the year and state income tax. Any other big purchases that incurred sales tax would also be applicable if you have the receipts handy in case anyone ever comes asking. Small ones too, but who tracks that?
No point worrying if what you're looking at in total doesn't take you over the standard deduction, but if it's close to a toss up your tax software or person should work out if it does or not and do the thing that is most beneficial.
posted by How much is that froggie in the window at 7:08 PM on June 18, 2020 [1 favorite]