Does a Car Loan Through a Dealership Get Report to the IRS?
Does a car loan through a dealership get reported to the IRS? The answer depends on the circumstances of the transaction. If the dealership receives a check for $15000 and it later cancels the deal, the dealer must report this transaction to the IRS. Otherwise, the dealership may voluntarily file Form 8300. In addition, if the dealer receives multiple payments for more than $10k, it must treat these payments as one single transaction.
The answer is yes. In certain situations, a dealership is required to file a Form 8300 if the cash payments to the dealership total more than $10,000 during a twelve-month period. However, this doesn’t necessarily mean that a dealership needs to file a report. The dealership can volunteer the information and explain that it must file Form 8300 when it receives cash payments over $10,000.
However, if you’re self-employed, the lender will need your latest tax returns, including your Schedule C. Schedule C summarizes your business income. You may want to consider cutting down on your business expenses. This will increase your income and allow you to pass income verification. The lender will also report your loan to the IRS if you default on it. A tax refund can be at risk if the auto lender sues you.
If you have a good credit score, the dealership should be able to give you a car at a low interest rate. That way, you can invest the money you’ve saved for the car instead of paying off the loan. And when you pay off your loan early, the dealership will get charged back the difference. It’s easy to see why the IRS doesn’t like car loan deals with no down payment.