Wednesday, December 09, 2009

If you were thinking of buying a car, you might want to hurry! Unknown tax credit ends at the end of 2009!

Taxpayers who buy a new car or several other types of motor vehicles this year may be entitled to a special tax deduction when they file their 2009 federal tax returns next year. The tax break is part of the American Recovery and Reinvestment Act of 2009. Thanks to our local news station for helping to get the word out ABC Action 7 news here in Sarasota.

And you don't even have to bring in a clunker either. It would be nice if this credit did not have such a quick expiration.

I had just found out that as part of the latest stimulus package, you may be able to deduct the taxes paid on a new vehicle purchase through the end of the year. I had to share this because I think that if you were considering buying a car you might want to get it done before it expires at the end of the year. Check out this IRS web site for full details.

Also, this applies to not just cars. RV's, trucks, motorcycles, are also included up to 49,500.

Maybe somebody will get that car under the tree. I am surprised that the car companies are not promoting this more with all their ads that encourage cars as the "perfect" gift for the holidays.

Here was some key points to the deduction

  1. State and local sales taxes paid on up to $49,500 of the purchase price of qualifying vehicles are deductible.
  2. Qualified motor vehicles generally include new (not used) cars, light trucks, motor homes and motorcycles.
  3. Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.
  4. This deduction can be taken regardless of whether or not you itemize other deductions on your tax return.
  5. Taxpayers will claim this deduction when filing their 2009 federal income tax return next year.
  6. The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.
  7. The deduction may not be taken on 2008 tax returns

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