Question

Car Purchase and Tuition Reimbursement

Forum|Forum|1 year ago
March 1, 2025
2 replies
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Good Morning.

I recently bought my car in cash. I am in the state of New York. I was wondering if I can input that purchase into my taxes this year, and if so where I can locate that in the TurboTax tabs.

I also participated in school through my employer's tuition reimbursement program and received a 1098-T to put into TurboTax. After entering the information, the return I would get from Federal shot up from $5 to $400 even though I was reimbursed already. I entered the information exactly as shown from the 1098-T as directed from TurboTax. Please let me know if this is normal.

Thank you for any help provided.

Best,

Jonathan

TurboTax Basic Windows

M

MindyB

First, the car you purchased is not a deduction, but the sales tax could be. ‌In the sales tax section, choose Easy Guide and tell the software about the car purchase on the page Enter Major Purchases.

Here's how you can navigate to the sales tax entry in TurboTax Online:

Navigate to Federal > Deductions & Credits > Estimates and Other Taxes Paid > Sales Tax > Start or Revisit

If you're itemizing, you must choose between deducting your state and local income taxes or your state and local sales taxes. You can't claim both.

Next, for the 1098-T, since you were reimbursed by your employer (and if you were not taxed on the reimbursement because it was less than $5,250), you can elect not to enter the 1098-T. Alternatively, you can enter the amount received as reimbursement in the 1098-T section. ‌Continue through the 1098-T entry until you arrive at Scholarships and Financial Aid. ‌

Note, your refund may increase if you received reimbursement in excess of the tax-free amount ($5,250 in 2024) as those expenses would be allowed. If that is the case, only enter $5,250 in the box for Employer-Provided Assistance.

J

JPerry135Author

Hi Mindy,

Thank you for the response.

I work from home in the state of New York. The workplace is in Oklahoma. Do I file my W-2 for boxes 15-17 under New York or Oklahoma?

Also for the state taxes section, am I filing for both states with Oklahoma non-resident and New York resident?

Thank you,

Jonathan

B

BrittanyS

Can you clarify if your W-2 shows taxes being paid to Oklahoma or New York?

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O

Opus 17

Car: As a practical matter, no.

You can deduct state income tax OR state and local sales tax, not both. If you deduct sales tax, you can deduct all the sales tax you can prove with receipts including the car. Or, you can use the optional standard method where the IRS gives you a deduction based on your income and location. You can add a motor vehicle to the optional method. BUT, New York's income taxes are likely higher than any sales tax deduction you qualify for, so as a practical matter, there is no point in trying for the sales tax deduction. (You can try, but it likely won't help.)