New Car Sales and Excise Tax Deduction
| The new economic stimulus plan |
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| includes provisions that allow
a federal income tax deduction for state and local sales and
excise taxes. This is applicable only to cars purchased as early as February 17, 2009 but no later than December 31, 2009. Unlike the first-time home buyer credit, this tax deduction is not available for purchases that were made before the Economic Stimulus bill was signed into law on February 17. This deduction applies to state and local sales and excise taxes on the first $49,500 of the purchase price of new cars, light trucks, recreational vehicles, and motorcycles. The full deduction is available for individuals with modified adjusted gross income up to $125,000, or joint filers with modified adjusted gross income up to $250,000. Those with higher incomes (up to $135,000 and $260,000, respectively) will see the deduction reduced proportionate to income. Visit the
IRS website for more information. |
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