(BRICK, NJ AREA) - Stimulus Package Allows Tax Deduction on New Cars Bought through 2009.

(BRICK, NJ AREA) - Stimulus Package Allows Tax Deduction on New Cars Bought through 2009.



Did you know that the American Recovery and Reinvestment Act of 2009 allows sales tax deductions on new vehicle purchases.


What are the specifics for auto shoppers? In sum, state and local motor vehicle sales taxes and motor vehicle excise taxes are all deductible on any new car, light truck, recreational vehicle, or motorcycles purchased between February 17th and December 31, 2009. Individuals with a modified adjusted gross income of less than $125,000 or joint-filers making less than $250,000 a year in 2009 qualify.


According to the National Automobile Dealers Association, it doesn't matter what model year your vehicle is (2008 or 2009, for example). New vehicles of any model year qualify so long as you're the vehicle's first owner.

Any vehicle sold for under $49,500 qualifies for the full deduction, but consumers may also deduct sales taxes on the first $49,500 of any vehicle sold above this price. It is considered an "above the line" (for itemizers and non-itemizers) deduction on federal tax return.

Of course, the actual amount of your deduction depends on your tax bracket, so consult with a tax professional for more details.

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