Friday, May 11, 2012

Tax-free New Car Purchase

The IRS is offering a tax break for individuals who purchase a new car, light truck, motor home or motorcycle. You can read about the original announcement here.
Here’s a quick guide of how it works…
  • State and local sales taxes paid on up to $49,500 of the purchase price of qualifying vehicles are deductible.
  • Qualified vehicles generally include NEW: cars, light trucks, motor homes and motorcycles.
  • Purchases must be after Feb. 16, 2009 and before Jan. 1, 2010.
  • The tax deduction can be taken regardless of whether or not you itemize other deductions on your tax return.
  • Claim this deduction when filing your 2009 federal income tax return not your 2008 taxes.
  • 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.
If you are considering buying a new vehicle this tax incentive means there has never have been a better time to buy.   But if you can do without, you’ll save even more!


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