Car purchases made before January 1, 2010, may qualify for a special sales tax deduction under the American Recovery & Reinvestment Act of 2009.
Taxpayers that purchasing a new car, light truck, motor home or motorcycle could qualify for a special deduction for the state and local sales and excise taxes on their 2009 tax returns. The deduction is limited to the sales and excise taxes and similar fees paid on up to $49,500 of the purchase price of a new vehicle.
Note, this deduction is for new purchases only, used and certified used car purchases do not qualify for this special sales tax deduction.
The special sales tax deduction is available regardless of whether taxpayers itemize deductions on their returns. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return.
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 special deduction.
If you would like more details about this special sales tax deduction, please call our offices and ask to speak to one of our shareholders or email us at info@taxwarriors.com.