Daycare Tax Tips

Deduction for Sales Tax on New Motor Vehicles

Did you buy a vehicle this year?

There is a new deduction for state or local sales tax imposed on new motor vehicles purchased after February 17, 2009, and before 2010.

You can either claim a standard deduction or an itemized deduction. The standard deduction is in addition to the basic standard deduction, so you can claim a deduction even if you don’t itemize. Otherwise, you can claim an itemized deduction for sales tax on new vehicles in addition to the state income tax deduction.

You may deduct the sales tax attributable to the first $49,500 of the purchase price of a qualified vehicle. Qualified vehicles include cars, light trucks, motor homes, and motorcycles. The deduction is gradually reduced when your modified adjusted gross income is between $125,000 and $135,000 ($250,000 and $260,000 if married filing jointly).

Posted on 2009-06-27 00:22:55