Tag Archives: tax refund

tax deductions for personal car

Tax Deductions for Personal Vehicles

This entry was posted in Used Cars and tagged , , , on by .

Looking to buy a new vehicle? Wondering if your purchase qualifies for tax deductions? 

Buying a car for personal or business use may have tax-deductible benefits. The IRS allows taxpayers to deduct either local and state sales taxes or local and state income taxes, but not both. You can also deduct some of your vehicle’s operating costs if you use the car for business, charity or medical purposes.

Since it’s tax season and everyone has taxes on their brain, let’s cover what you need to know about tax deductions for personal vehicles. 

Car Sales Tax 

You may be able to deduct the car sales tax you paid when you purchased a new or used vehicle from a private seller or dealership. On your purchase order, it will state the amount owed in car sales tax. 

Both local states and local governments can charge sales tax. There are only five states that don’t pay any sales tax when purchasing a car: Alaska, Delaware, Montana, New Hampshire and Oregon. 

Property Taxes 

Some states also charge personal property taxes in addition to the sales tax. Property taxes are typically based on the car’s value. The higher the value of the car, the more you’ll pay in property taxes. 

Since the IRS only allows you to deduct up to $10,000 total in sales, income and property taxes, you’ll want to compare the two numbers – property tax and sales tax – and deduct the one that is larger. 

To determine this, you may have to play around with the numbers using tax software. You can itemize your deductions, or take a standard deduction. If you live in a state that doesn’t charge sales tax, then you’ll obviously just deduct the property taxes. 

What if I Use My Vehicle for Business, Too? 

If you use your car exclusively for business, you can write off most, if not all, of your car expenses, including car depreciation and car mileage. If you use your car for both business and personal purposes, as many people do, you’ll need to divide your expenses based on the mileage you’re using for each. 

You may also qualify for deductions if you own an electric vehicle. There is a $7,500 federal income tax credit for electric or plug-in hybrid vehicles, in addition to local or state incentives. You can learn more about driving down your taxes in this article from TurboTax. 

If you’re thinking about buying a car, you may be able to write some of it off on next year’s taxes, especially if you plan to use the vehicle for business purposes as well. To browse affordable repo cars directly from banks, lenders and credit unions, visit RepoFinder.com today

buy car with tax refund

Put Your Tax Refund Toward a Used Car

This entry was posted in Repo Cars and tagged , , , on by .

Not everyone gets a tax refund at the end of the year, but if you’re one of the lucky ones who does, you might be wondering what you should do with it! While there are many fun things you can spend your money on, a lot of people like to put their tax refund to good use, such as paying down debt or making improvements around the home. Another smart idea is to put your tax refund toward the new vehicle you’ve been saving up for. 

According to the IRS, the average refund amount in 2023 is $3,079. Having a few extra thousand dollars to put toward a car can be extremely helpful, especially when you’re looking to buy a used vehicle! Here are the different ways you can put your tax refund toward a used car.

Apply Toward the Purchase Price 

RepoFinder provides a directory of banks and credit unions that are selling their repo inventory. They are highly motivated and eager to sell, which is why the vehicles already include a steep discount. You can find plenty of cars for under $10K and $15K. 

Having a few thousand dollars to put down can reduce the purchase price significantly. You can then finance the rest of the amount, and your payments will be lower. You can also put yourself in a better position to negotiate when you come with a pre-approval for a car loan.

Cover Maintenance and Repairs 

Another way you can use your tax refund is to pay for the maintenance and repairs your vehicle might need. For instance, when you purchase a repo car, it does not come with a warranty, unless the original manufacturer warranty is still intact. In this case, the warranty would transfer for you.

However, most repos do not have a warranty, which is why you buy them in as-is condition. You get a nice discount in return, but you’re also responsible for whatever problems come up. It might make more sense to save your tax refund and use it to cover the cost of maintenance and repairs, such as new tires or a professional detailing. 

Pay Leasing Fees Upfront 

RepoFinder does not offer cars to lease – only to buy. But leasing is still an option you may want to consider if you want a nice car without all the maintenance. A decent sized tax refund should be enough to cover a lease’s upfront costs. After this, you’ll be responsible for making your monthly payments. 

Do keep in mind that leasing has some pitfalls. You can face bills for extra mileage and wear and tear when you turn the car in. You’ll also be responsible for paying these fees every time you trade in the car, otherwise they are rolled into your loan. 

Use Your Tax Refund on a Repo Car! 

These are some of the ways you can put your tax refund toward a used car. When you buy a car on RepoFinder, you’ll have access to many banks and credit unions in your area. We include photos and contact information so that you can negotiate directly with the seller. If you have been in need of a car and received a tax refund, this could be the way to get what you need quickly and inexpensively!