If
you bought a vehicle through the
CARS Act (“Cash for
clunkers” program), the $3,500 to $4,500 credit you received
towards the purchase of a new car is not taxable to the
purchaser of the vehicle.
If
you buy a qualified motor vehicle (that is, a new car, light
truck, motor home, or motorcycle) after February 16, 2009,
and before 2010, you can deduct state and local sales and
excise taxes paid on the purchase. This deduction is
allowable whether you itemize deductions or take the
standard deduction and is limited to taxes paid on up to
$49,500 of the purchase price of a car. The deduction is
phased out for single taxpayers whose modified adjusted
gross income is between $125,000 and $135,000 and for joint
filers whose modified adjusted grow income is between
$250,000 and $260,000.
Taxpayers who purchase a new motor vehicle in states that do
not have a state sales tax, such as Alaska, Delaware,
Hawaii, Montana, New Hampshire, and Oregon, can deduct other
fees or taxes imposed by the state or local government.
Joe
Learn more about
Joe DePetris, Jr., and IBO tax return preparation
and tax issues at
IBO Bookkeeping 101.
Find more Tax Tips for IBOs from Joe DePetris, Jr., CPA.
This article is provided as an
educational resource for your guidance, and is
strictly informational. It does not constitute
legal, accounting, or other professional
counsel. Nothing included herein implies a
recommendation by the author, the
IBOA International, or
Amway Global, of any course or method of
regulatory compliance. Readers and users who
intend to take, or refrain from taking, any
action based on information contained herein
should first consult with their qualified tax
advisor, preferably a C.P.A., or appropriate
regulatory authorities.
