- 1). Fill out "Form 1040" from the Internal Revenue Service with information about your income and deductions as specified.
- 2). Fill out the "Schedule A" form from the Internal Revenue Service in order to itemize your deductions. Select the checkbox next to "General Sales Taxes" in order to deduct the state and local sales taxes that you paid for your vehicle and other purchases. Do not select "Income Taxes" or you cannot claim the sales tax paid on your vehicle.
- 3). Determine your state's general sales tax rate from the table in the "Schedule A" instruction manual provided by the IRS.
- 4). Multiply the original cost of your vehicle by your state's general sales tax rate. For example, if you purchased a $15,000 car and your state's general sales tax rate is seven percent, you would multiply $15,000 by 0.07. The result is your maximum allowed deduction for the vehicle.
- 5). Locate the amount of sales tax you paid on your vehicle purchase receipt. Compare this number to your maximum allowed deduction for the vehicle. Determine which number is lower if both figures are not equal.
- 6). Add the lower number to the amount of sales tax you paid on other items during the year, based on receipts. Do not add sales tax for items if you do not have the receipt. The total amount of sales tax is your sales tax deduction.
- 7). Enter your total sales tax deduction next to the box you selected on "Schedule A."
- 8). Research your state's income tax policies, if you have an income tax, to determine if you can also deduct the sales tax you paid on your vehicle on your state income tax.
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