New Car Sales Tax Deduction
Did you buy a new vehicle this year? If so you may qualify for an additional tax break.
The American Recovery and Reinvestment Act allows many hard-working taxpayers to claim a sales tax deduction for state and local sales tax paid on the purchase of new vehicles. This includes cars, light trucks, motor homes and motorcycles.
The deduction is available on new vehicles purchased from Feb. 17, 2009 through Dec. 31, 2009. In states that don't have sales tax, the law provides a deduction for other taxes or fees paid, so you will need to research the deduction allowed for your state. This deduction is available whether or not a taxpayer itemizes deductions on Schedule A.
The limit for this deduction is $49,500 for the taxes and fees you have paid for the purchase price of an eligible vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify for this additional deduction.
Used cars are not eligible for this deduction, new vehicles only (you must be the first owner of the vehicle). Leased vehicles and rentals do not qualify for this tax deduction. The law specifies that the deduction applies to the purchase of qualified new vehicles. A lease is not a purchase for the purpose of this deduction.
There is no limit on the number of cars for which you can claim the deduction, provided each car is a qualified new vehicle.
For more information on the new car sales tax deduction, visit TurboTax Online. They have all the latest tax information in the support section of their website.
This page refers to cars purchased from Feb.17, 2009 through Dec.31 2009 - what about cars puchased in 2011?
Posted by: bruce johnson | March 07, 2012 at 07:35 AM