Tax credit question

[cajunmommy]

I remember there was talk earlier in the year about a tax credit for vehicle purchases. Does anyone remember if it's restricted to new car purchases only? IIRC, it was a credit on the sales tax.

I think the details were overshadowed by the Cash for Clunkers program. Sound familiar to anyone?

 

[tayandjensmom]

I too am looking for this answer. We bought a used 2008 Escape in June. Hoping I can write off the sales tax on it! I'll be watching for a reply. Thanks so much.... Lisa

 

[Irish9697]

I'm a CPA, but too busy at work right now to write much, so I am cutting and pasting from the irs website for you. There is also a credit for the purchase of some hybrid vehicles. I can get you more information later if you need it.


From irs.gov

The American Recovery and Reinvestment Act permits taxpayers to take a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles. The deduction is available on new vehicles purchased from Feb. 17, 2009, through Dec. 31, 2009. In states that don't have a sales tax, the law provides a deduction for other taxes or fees paid. This deduction is available whether or not a taxpayer itemizes deductions on Schedule A.

The deduction is limited to the taxes and fees paid on up to $49,500 of the purchase price of an eligible vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.

 

[dfchelbay]

I'm a CPA, but too busy at work right now to write much, so I am cutting and pasting from the irs website for you. There is also a credit for the purchase of some hybrid vehicles. I can get you more information later if you need it.


From irs.gov

The American Recovery and Reinvestment Act permits taxpayers to take a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles. The deduction is available on new vehicles purchased from Feb. 17, 2009, through Dec. 31, 2009. In states that don't have a sales tax, the law provides a deduction for other taxes or fees paid. This deduction is available whether or not a taxpayer itemizes deductions on Schedule A.

The deduction is limited to the taxes and fees paid on up to $49,500 of the purchase price of an eligible vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.

Would this go on the same line as writing off the cost of state license tabs (for auto plates) on the Schedule A?

 

[allyphoe]

Would this go on the same line as writing off the cost of state license tabs (for auto plates) on the Schedule A?

No, it goes on Line 7 (its own separate line) on the 2009 Schedule A, or on Line 12 of the new Schedule L (for people taking a non-standard standard deduction).

 

[dfchelbay]

No, it goes on Line 7 (its own separate line) on the 2009 Schedule A, or on Line 12 of the new Schedule L (for people taking a non-standard standard deduction).

Thanks, just wrote a "note to self" in my 2009 write-offs folder. Certainly don't want to forget about such a huge deduction.

Thanks again.