New Passenger Vehicle Purchases May Offer Tax Deductions on 2009 Tax Returns

According to Kris Braunberger, partner with HintonBurdick CPAs & Advisors, “The Internal Revenue Service recently announced that taxpayers who buy a new passenger vehicle maybe able to deduct state and local sales and excise taxes on their 2009 tax returns.”  “For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year,” said IRS Commissioner Doug Shulman. “This deduction enables taxpayers to buy now and get cash back later on their tax returns.”  The tax break is part of the American Recovery and Reinvestment Act of 2009.


Here are seven things you should know about this new deduction:
 
1. State and local sales taxes paid on up to $49,500 of the purchase price of each qualifying vehicle is deductible.

2. Qualified motor vehicles generally include new (not used) cars, light trucks, motor homes and motorcycles.

3. Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.

4. This deduction can be taken regardless of whether or not you itemize other deductions on your tax return.

5. Taxpayers will claim this deduction when filing their 2009 federal income tax return.

6. The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

7. The deduction may not be taken on 2008 tax returns.

Consumers who are considering buying a new car may find that this tax incentive means there may have never been a better time to buy.”

If you have any questions please give HintonBurdick a call at one of their offices listed below or visit their website at www.hintonburdick.com for weekly tax tips.  They can quickly help you assess your tax outlook and possibly save some tax dollars for the year.  Learning how to make better use of the recent bill or if you have further questions, please feel free to contact HintonBurdick CPA’s & Advisors at, (435) 628-3663. Also, visit their website at www.hintonburdick.com for weekly tax tips.