Do You Itemize Tax Deductions? You Might be Able to Deduct Some of Your Vehicle Registration Fees

carDo you get irritated at how much it can cost to register your vehicle(s) each year? The good news is that you may be able to get some of that money back in the form of a tax deduction. That’s right, if you itemize your deductions on Schedule A, and your registration fee is based on vehicle value (not weight), you can itemize that deduction. This is an often overlooked deduction, but given the value of some vehicles, it could be worth checking into.

The IRS states:

It has to be a personal property tax, not an excise tax, in order to be deductible. Deductible personal property taxes are only those based on the value of personal property such as a boat or car. The tax must be charged to you on a yearly basis, even if it is collected more than once a year or less than once a year. To be deductible, the tax must be charged to you and must have been paid during your tax year. Taxes may be claimed only as an itemized deduction on Form 1040, Schedule A, Itemized Deductions.

So, you will want to check with your state to determine whether your vehicle registration fee is calculated by value, weight, or a combination. If all or part of the fee is based on value, you should be able to deduct that portion on line 7 of Schedule A.

For more information: IRS Publication 17 – Personal Property Tax Section

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

2 comments
Cyndy
Cyndy

Thank you for your site! I sat on the phone with the IRS for 3 hours to ask about Broker Commissions and not one of the 9 people I spoke with new anything. They all made suggestions about where to add in the amount, but noone knew for sure! I appreciate you simple answer. It made it some much easier to do the taxes this year.

MoneyNing
MoneyNing

Hmm this one is good :) I still do standard deductions right now but hopefully I will do itemized deductions soon (meaning i can deduct more things)