Get a tax break for buying a new car in 2009

  • Published
  • By Tech. Sgt. Laura Rosenzweig
  • 71st Flying Training Wing Legal Office
VANCE AIR FORCE BASE, Okla. --  If you took advantage of the cash for clunkers program this year, you may benefit again with the new car sales tax deduction. 

This benefit is available through the American Recovery and Reinvestment Act of 2009 which gives a deduction for state and local sales and excise taxes paid on the purchases of qualified new vehicles purchased anytime between Feb. 16, 2009, and Jan. 1, 2010. 

Qualified motor vehicles include passenger automobiles, light trucks, motor homes and motorcycles that have a gross vehicle weight rating of 8,500 pounds or less. 

There are a few restrictions with the new deduction, including a cap on the amount of sales tax that can be deducted. Only state and local sales taxes paid on up to $49,500 of the purchase price of the vehicle are deductible. 

For example, if you buy a $60,000 car, only the taxes paid on the first $49,500 are deductible. Additionally, the amount of the deduction starts phasing out for single individuals making more than $125,000 or married couples making more than $250,000. 

Additionally, 2008 models and foreign vehicles are eligible as long as they are brand new. Used cars do not qualify for the deduction. 

If you do not itemize deductions on your taxes, don't worry. Any qualified individual may use the deduction by following the instructions on his or her 2009 tax return. There is no limit on the number of vehicles this deduction can be used on. 

For more information, visit the Internal Revenue Service Web site, www.irs.gov, or contact Vance Tax Center representatives Ed Myer, 213-6421, or Tech. Sgt. Laura Rosenzweig, 213-6162.