WA Tax Credit
#1
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I know there are a number of Washington folks on this forum, so thought i'd ask: does anyone know how/if this trade tax credit works if you are buying a car out of state? Does it not apply in that case?
Posting the question in a few other places too.
Posting the question in a few other places too.
#2
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I believe that sales tax/deductions will be collected by the dealer, by their rate in that state. Just like if you bought a T.V. at the Best Buy in El Segundo.
Washington will make you pay any difference when you go to title the car. Technically you are supposed to do this with any purchase, like the t.v., but of course nobody does it.
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disclaimer: I'm not a CPA ... take that for what it's worth...
The Washington State Sales Tax Credit allows Washington State residents to deduct Washington State Sale Tax and Local Sales Tax as part of your deductions on your federal return.
The Washington State Sales Tax Credit allows Washington State residents to deduct Washington State Sale Tax and Local Sales Tax as part of your deductions on your federal return.
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I think what you're asking is the tax difference on a trade in.
That will apply only if the car is traded in WA (unless that state has a similar benefit)
ie. $50,000 car purchased, $20,000 equity in trade = $30,000 sales tax amount based on city where purchased.
If you purchase a vehicle you can deduct the taxes paid on your return as stated above.
I recommend you call WA DOL and ask them what you'll have to pay when you title the car in WA - that would be my advice. Also not a CPA, just from my experience buying/trading cars & paying taxes in WA.
That will apply only if the car is traded in WA (unless that state has a similar benefit)
ie. $50,000 car purchased, $20,000 equity in trade = $30,000 sales tax amount based on city where purchased.
If you purchase a vehicle you can deduct the taxes paid on your return as stated above.
I recommend you call WA DOL and ask them what you'll have to pay when you title the car in WA - that would be my advice. Also not a CPA, just from my experience buying/trading cars & paying taxes in WA.
#5
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Also, I believe you can only claim the tax on the first $40,000 of value, not the entire car if it exceeds this. I was under this with the above mentioned trade in value, so I was able to not pay fed tax on my tax I paid for my 2010 S4.
#6
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I'm guessing you bought your 2010 @ the end of 2009? Although you were allowed to deduct sales tax (subject to limits) on car purchases made in 2009, this deduction is no longer available - this deduction reduced your taxable income and was not a $ for $ tax credit. For Federal tax purposes (assuming you itemize), you can deduct EITHER your state income taxes or state sales tax paid (not both) - for most taxpayers, your state income tax will most likely exceed your state sales tax paid (even with a new car purchase).
#7
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I'm guessing you bought your 2010 @ the end of 2009? Although you were allowed to deduct sales tax (subject to limits) on car purchases made in 2009, this deduction is no longer available - this deduction reduced your taxable income and was not a $ for $ tax credit. For Federal tax purposes (assuming you itemize), you can deduct EITHER your state income taxes or state sales tax paid (not both) - for most taxpayers, your state income tax will most likely exceed your state sales tax paid (even with a new car purchase).
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