Thursday, December 24, 2009

Bought a car? Don't forget Sales Taxes

Taxpayers who purchased a new vehicle between Feb. 17, 2009 and Dec. 31, 2009 will be able to deduct state and local sales taxes through the American Recovery and Reinvestment Act (ARRA). This deduction is available whether the taxpayer uses the standard deduction or itemizes.

Qualifying vehicle includes cars, light trucks, motor homes and motorcycles. Both foreign and domestic are eligible. Leasing or purchasing a used vehicle does not qualify.

The deduction is phased out for taxpayers with modified AGI between $125,000 and $135,000 ($250,000 and $260,000 for joint filers) and only includes taxes paid on up to the first $49,500 of the purchase price.

No comments:

Post a Comment