New Vehicle Sales Tax Deduction

New Vehicle Tax Deduction

Taxpayers who buy a new car vehicle this year may be entitled to a special tax deduction when they file their 2009 federal tax returns next year. The tax break is part of the American Recovery and Reinvestment Act of 2009.

1.State and local sales taxes paid on up to $49,500 of the purchase price of qualifying vehicles are deductible.
2.Qualified motor vehicles generally include new (not used) cars, light trucks, motor homes and motorcycles.
3.Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.
4. This deduction can be taken regardless of whether or not you itemize other deductions on your tax return.
5.Taxpayers will claim this deduction when filing their 2009 federal income tax return next year.
6.The amount of the deduction is phased out for higher income taxpayer's ($125K++)

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The Standard Disclaimer: The foregoing discussions of the American Recovery & Reinvestment Act are offered for informational use only and do not constitute tax advice.