Itemized Deduction - Prsnl Property Tax

[peggysioux]

How do other tax preparers determine the deduction of license fee of vehicles when client does not bring the breakdown of fees from the vehicle renewal for a vehicle showing what the license fee is, but just brings in a total $ figure for each vehicle and did not keep the renewal notice for records?

[Gretel]

I don't give them the deduction. They can to the county and get the info. A number of my clients does.

[JCH]

How do other tax preparers determine the deduction of license fee of vehicles when client does not bring the breakdown of fees from the vehicle renewal for a vehicle showing what the license fee is, but just brings in a total $ figure for each vehicle and did not keep the renewal notice for records?

In my state (MN) it's generally pretty easy to figure out based on the gross amount. With most of my clients, if they have an amount written in their organizer I'll take their word (unless the number looks really off). I don't audit the amounts my clients provide, and that's in my engagement letter.

[S T]

Calif DMV

Calif DMV on their website has a lookup for the deductible portion on the license fees. . All you need is the vehicle's last 5 digits of the VIN# and the License Plate #.

Sandy

[Gene V]

How do other tax preparers determine the deduction of license fee of vehicles when client does not bring the breakdown of fees from the vehicle renewal for a vehicle showing what the license fee is, but just brings in a total $ figure for each vehicle and did not keep the renewal notice for records?

What state are you looking for. We don't have a deductible fee in Washington and Oregon

[erchess]

As I understand it,

an amount that is a flat fee per vehicle is not deductible but an amount that is equal to a percentage of the vehicle''s weight or book value is deductible. In North Carolina, that distinction is easy for me to implement because the NC Department of Motor Vehicles charges a flat fee for the ownership of a license plate each year while the county of residence charges a fee that is a percentage of the blue book value. The two fees are distinct in my clients' minds even if the reason why the one to DMV is not deductible is no more clear to them than to me.

And by the way, I don't know why the book in question is called the blue book but the copies I have seen have yellow covers and white pages with black print. When it comes to taxes, I often find that I don't understand all I know.

[OldJack]

For purposes of 1040 Sch-A:
A license fee is for the right to use a vehicle on the roads and is not deductible. Personal property tax is a fee for just owning a vehicle and is deductible.

[jainen]

A license fee

>>>>A license fee is for the right to use a vehicle on the roads and is not deductible<<

In California, the "License Fee" is indeed the deductible personal property tax.

When the client doesn't bring the DMV bill, I ask if the number they are giving me is the amount of their check or the deductible amount. If it's the amount of the check, I subtract $40 for a car and $100 for a truck. First I check my file--if they brought me the bill last year, I can look up the exact figure the way Sandy explained.

[S T]

Do you

Jainen, Calif, $40 is the base registration fee in Calif + $60 or so for truck with weight fee.

Do you also include for the client the deduction for the smog fee and the CHP fee and the other fees?? I thought we could only deduct the VLF fee which is based on the value of the vehicle.

Example:

Registration Fee $40
License Fee (maybe an income tax deduction) VLF $97
Weight Fee $60
Special Plate Fee $25
County/District Fees $11
Owner Responsibility Fee $15
Smog Abatement Fee $12

So in this example, what would the tax deduction be???

I have only been deducting the VLF fee.

Sandy

[jainen]

we are all so humble

>>I have only been deducting the VLF fee.<<

Only the Vehicle License Fee is deductible (unless the car is used for business). I don't see fees as high as yours in Santa Cruz--$40 is about it, or $42. Nobody has any personalized plates as far as I know, because we are all so humble.

[S T]

I would think

Jainen

Your concept of $40 or $100 is great. I have just always used the $40 plus the other fees or $100 plus the other fees.

I would think that fees in the Northern part of California would be higher than Southern Calif.
Can you clarify for me, we are not to include all of those other extraneous fees, like smog, CHP, etc. as a tax deduction, it is strictly the VLF fee for Calif?

The problem now is that some are at $40, plus $11 or $12, and some are at $40, plus $11, plus $12 down here in So Calif. assuming we also don't have personalized plates. So we are at either $51-52 or at $61-63. I think it has to do with the year of the vehicle.

So if I don't have the information available I tag them for the higher non-deductible amount, if there vehicle has been purchased in the last 2 years, say 2004 - 2006. Anything prior to that I deduct the lower amount and then allow as a deduction.

Your thoughts?

Sandy

[OldJack]

TheTaxBook page 4-10 shows a good example:

[peggysioux]

Itemized Deduction - Personal Property Tax

Thanks to all for the info. It will be very helpful now that I know I can get the info from the California DMV website.

Thanks again!!!

[taxea]

Itemized Deduction - Prsnl Property Tax

It is the client's responsibility to provide this information. Have them call DMV or charge for the research to determine the amount. taxea