Yes that is correct.

Deduction and write off are the same exact thing.

I guess basically you just subtract the car cost from your taxable income for both federal and state tax forms - and THEN carry on with the usual calculation (apply std deductions etc. etc.)... but anyway, I confirmed, its not going to result in a $900+ saving by any means as someone above pointed out.

That's not correct. You do not deduct the cost of the car from your taxable income. That would be a massive deduction.

You deduct the sales tax that was paid on the car on your federal return, not your state return. Again, this has absolutely nothing to do, what-so-ever, with state tax returns. It's only federal.

Also, as someone pointed out, the amount of money this reduces your tax burden by is directly proportional to the percentage of your adjust gross income that is actually taxed.. i.e., the higher your tax bracket, the more money you save on your tax bill.

^^^ I'm sorry, yes I made a typo. Meant to say deduct cost of tax paid ON the car. And that in the end this saving is negligible for an say an average buyer who say makes 50-70k a year.

The formula is quite simple assuming you don't drop to a lower bracket from your deductions: (Federal Tax Bracket) * (Sales Tax Paid)


@60k/year you're in the 25% tax bracket
If you paid 2,000 on sales taxes on the car then you get back $500. That's almost 2 Playstation 3s!

It was $900+ for that particular person since he is in the 30% bracket and he paid almost 10% in sales taxes.

^^^^ Oh okay....

Florida also has no state income tax and we are alowed to deduct ALL sales taxes paid during the year. I keep all my receipts and the actual tax paid is always more than what is printed in the tax table especially if a major purchase ...ie auto...was made during the year.