Vehicle Tax Deduction YouTube Video and audios for podcast in English and Spanish
The American Recovery and Reinvestment Act permits taxpayers to
take a deduction for state and local sales and excise taxes paid on the
purchase of new 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 a sales tax, the
law provides a deduction for other taxes or fees paid. This deduction
is available whether or not a taxpayer itemizes deductions on Schedule
A.
The deduction is limited to the taxes and fees paid on up to $49,500
of 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.
Taxpayers who make qualifying new vehicle purchases this year can estimate the deduction with the help of IRS Publication 919,
How Do I Adjust My Withholding? Lines 10a to 10k on Worksheet 10 take
into account purchases above the $49,500 limit, as well as the reduced
deductions for taxpayers at higher income levels.
Questions and Answers
If you have questions about the deduction for sales tax and other fees, these questions and answers might help. | 