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Missed The Clunker Program? Sales Tax Deduction is Still Available!
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Missed The Clunker Program? Sales Tax Deduction is Sti... - 10/10/2009 8:23:22 PM
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clydewolf
Posts: 43
Joined: 8/6/2009
Status: offline
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Since February 17, 2009 when the President signed the American Recovery and Reinvestment Act of 2009, the sales and excise taxes we pay when we purchase a new automobile can be Added to our Standard Deduction. This tax benefit will disappear on January 1, 2010.
To qualify for this tax deduction you must purchase a car that has no previous owner. The sales tax deduction is allowed on the first $49,500 of the purchase price. The deduction has income limitations that phase out over a $10,000 range. The phaseout begins with a Modified Adjusted Gross Income of $125,000 for a single filer, and $250,000 for joint filers.
Prior to this legislation it was necessary to itemize your deductions and use the your state and local sales tax instead of state income tax to claime the sales tax deduction for your new car purchase. You can still do that. OR you can use the state income tax when you itemize your deductions and also claim the sales tax paid on your new car purchase.
Just do not claim the sales tax deduction twice.
And if you are in the AMT range, you can still take the Sales Tax Deduction. Usually the AMT Disallows the Standard Deduction and the Itemized Deduction. The Sales Tax Deduction for your new auto will still be allowed.
Qualified vehicles include new passanger car, light truck, motorcycle, and has a gross weight of 8,500 pounds or less. A motorhome can also qualify for this sales tax deduction.
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