(WXYZ) - The Internal Revenue Service says that taxpayers who buy a new passenger vehicle this year may be entitled to deduct state and local sales tax, as well as the excise taxes they pay, on their 2009 tax returns.
IRS spokesperson Luis D. Garcia says "this deduction lets car buyers purchase now and get money back later on their tax returns. This can make the decision to buy a new car a little easier this year."
The American Recovery and Reinvestment Act provides a deduction limited to the state and local sales taxes and excise taxes paid on up to $49,500 of the purchase prices of a qualified new car, light truck, motor home or motorcycle.
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. The IRS also alerted taxpayers that the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010, to qualify for the deduction. Purchases before Feb. 17, 2009, are not eligible for this special deduction.
The special deduction is available regardless of whether a taxpayer itemizes deductions on their return. The IRS reminded taxpayers the deduction may not be taken on 2008 tax returns which are currently being processed.
For more information visit www.irs.gov
