2009 New Car Purchases Qualify for Sales Tax Break

new carThe IRS is reminding taxpayers that the 2009 Stimulus Bill included a little something to help boost auto sales. Those who buy a qualifying new car, light truck, motor home or motorcycle in 2009 can deduct state and local sales tax and excise taxes paid on purchase prices up to $49,500. The deduction will be available for 2009 tax returns (only) whether one itemizes or not.

Showing considerable wit (for an IRS guy, at least), Commissioner Doug Shulman wrote in the announcement of the news, “For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase….” The deduction is phased out for taxpayers with modified adjusted gross incomes between $125,000 and $135,000 (individual filers) and between $250,000 and $260,000 (joint filers).  Qualifying vehicles must be purchased after Feb. 16, 2009 and before Jan. 1, 2010.

image by: wishymom

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Thomas Fisher, CFP®

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