Are my Car Registration Fees Deductible?
Are your car registration fees tax deductible on your Form 1040? Yes, they are deductible as an itemized deduction on Schedule A of Form 1040 under the tax section.
What portion of the car registration fees are tax deductible? Many people believe that the entire amount you pay for car registration fees is tax deductible. This is not true. Only the portion of car registration fees this is an Ad Volorem tax is deductible.
What does this mean? This is the portion of the registration fee on your car that is based on the value of the car. This is usually the biggest portion of your registration fee and it is segregated on your registration slip. You will need to pull out this document and take a look at it to determine what your deduction should be.
All non-business related auto registration fees are deducted on Schedule A of form 1040 as described above. However, if you use your car for business you do not deduct the car registration fees here. In that case, you deduct the fees on Schedule C for an unincorporated business (sole proprietorship). You first report the fee on Form 2106 and then roll it forward to Schedule C. You are only allowed the percentage that the vehicle is actually used for business on Schedule C.