Monday, March 1, 2010

Deductible Car Tabs?

A friend asked this weekend about the deductibility of her car tabs so I thought I'd relay that conversation here in case anyone else has the same question.

Q: Can we deduct the RTA and other costs on the cars?

A: Taxes paid to your state & local government are deductible on Schedule A as an itemized deduction. This usually includes sales tax or state income taxes paid. The cost of your car registration each year is not deductible because it's not a tax based on the value of your vehicle, it's a flat fee to keep your car licensed. However a small piece of it, the RTA tax, is deductible - being a tax based on the estimated value of your vehicle. This amount is clearly marked on your green registration form from the State of Washington each year.

Good luck!


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