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I am filing tax in US, I purchased a brand new car. I want to add to my tax deduction.

Tax software is suggested to include vehicle register fee? where can I can find it? should I enter the purchase price?

I am resident of WA for the whole year

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3 Answers

No, that's the DMV registration fee, usually somewhere around $50-$250, depending on the car price and the State you're in. You can find it on the itemized data sheet you got from the dealership. If you can't find it yourself, call the dealership - they'll help you.

You might also be able to deduct the sales tax you paid (assuming its over the standard deduction, and over the income tax you paid to the state).

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I believe that registration fees are not deductible unless the fee is based on the value of the car. In particular, flat fees (e.g. $100 per year for each car regardless of value) are not deductible. IRS Publication 17 (Your Income Tax) says "Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. You paid $32 based on the value ($1,500) and weight (3,400 lbs.) of your car. You can deduct $15 (1% × $1,500) as a personal property tax because it is based on the value. The remaining $17 ($.50 × 34), based on the weight, is not deductible." –  Dilip Sarwate Feb 27 '13 at 4:21
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Where you find the information will depend on the state you are in. We bought a new car in 2012 and live in Colorado. Here, the dealership collects sales tax, but not registration fees or ownership (AKA personal property) taxes. About a month after the purchase, we got some paperwork from the dealer that let us go to the county to get license plates. That's when we paid the registration fee, license fee, and ownership tax.

Our tax software actually told us which bits of the Colorado taxes/fees were deductible, and that information is on the Colorado registration paperwork that we need to keep in the car. See if the software can tell you where to look for your particular state.

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Vehicle registration fees are only tax deductible if they are based on the value of the vehicle and charged on an annual basis. This usually depends on the state you live in, as each state charges their registration fees differently. You've mentioned that you reside in WA, which does have deductible vehicle registration fees in certain counties. This is usually termed the Regional Transit Authority (RTA) Tax.

This deduction is part of the Itemized Deductions on Schedule A. If your Itemized Deductions do not come out greater than the standard deduction, the vehicle registration fees will not provide a benefit on your tax return.

You should also explore deducting the sales tax you paid on the purchase of the vehicle, especially because WA does not have a state income tax. The IRS gives you the option of deducting sales tax or state and local income taxes on Schedule A, whichever is higher.

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To deduct sales tax for the new car purchase should it be part of itemized deduction or this is in addition to standard deduction –  Gainster Feb 28 '13 at 5:54
    
It would be part of the itemized deductions. If it is not enough to make your itemized deductions greater than the standard deduction, you would receive no benefit from deducting the sales tax. –  superjessi Mar 1 '13 at 22:54
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