I just purchased a car and am in the process of closing out a home purchase (which I hope to complete by end of Feb 2017).

Are there any tax deductions on the purchase of a car or home? I looked online, but couldn't find any except for deduction of mortgage interest on the home.

A side question, I'm not planning to do this and am just curious: if I had a self-proprietorship, is it possible to write off the car (or perhaps home) as a business payment? I'm assuming not, but just wanted to ask how a car/house purchase for business purposes is looked at.

Purchase of car and home is in the United States, NY / NJ state if that helps.

1 Answer 1


If you itemize your deductions then the interest that you pay on your primary residence is tax deductible. Also realestate tax is also deductible. Both go on Schedule A.

The car payment is not tax deductible.

You will want to be careful about claiming business deduction for home or car. The IRS has very strict rules and if you have any personal use you can disqualify the deduction. For the car you often need to use the mileage reimbursement rates. If you use the car exclusively for work, then a lease may make more sense as you can expense the lease payment whereas with the car you need to follow the depreciation schedule.

If you are looking to claim business expense of car or home, it would be a very good idea to get professional tax advice to ensure that you do not run afoul of the IRS.

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