Sales Tax Deduction for Car Purchases Available through End
Oct. 7, 2009
Tax Deduction YouTube
WASHINGTON With 2010 models arriving in dealer showrooms,
the Internal Revenue Service reminds taxpayers that purchasing
a new car, light truck, motor home or motorcycle could qualify
them for a special deduction for the state and local sales and
excise taxes on their 2009 tax returns.
Purchases made before Jan. 1, 2010, will qualify for this deduction
under the American Recovery & Reinvestment Act of 2009 (ARRA).
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.
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.
who make qualifying new vehicle purchases this year can estimate
the deduction with the help of Worksheet
10 in IRS Publication 919, How Do I Adjust My Withholding?
Lines 10a to 10k of the worksheet show how to take into account
purchases above the $49,500 limit, as well as the reduced deductions
for taxpayers at higher income levels.
special 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.
those that have questions about the deduction for sales tax
and other fees, these questions
and answers might help. A videovideo on the IRS Youtube.com
channel and audio podcasts in English and Spanish are also available
to help taxpayers take full advantage of the deduction.
of the Sales Tax Deduction for Vehicle Purchases
Special Tax Break on New Car Purchases Available in States With
No Sales Tax