Q. I bought a new car costing $60,000 in 2009. Can I deduct the sales tax for the new vehicle purchase plus an amount for the optional sales tax deduction? S.P., Monroe, N.J.
A. No. You must choose one or the other. But remember that the sales and excise tax deduction for purchasing a new vehicle is limited to taxes on the first $49,500 of a vehicle’s cost. Therefore, because you purchased a higher-priced car, you might be better off choosing to deduct state and local sales taxes on the entire $60,000 cost of your new vehicle as well as sales taxes attributable to other items under the optional sales tax deduction.
Caveat: Choosing to claim this optional deduction precludes claiming any deduction for state income tax.
Tip: The new vehicle sales and excise tax deduction phases out for an AGI above $125,000 for single filers and $250,000 for joint filers. So, if your AGI exceeds either level, your choice is easier.
- 4 tips to gain office-bound employees' buy-in for telework
- Disturbing trend: Workers as their own lawyers
- Lawful Off-Duty Activities Statute requires caution before discharge
- Responding to an office affair? Don't forget the 'fair' part
- What are the notice requirements when moving someone from exempt to nonexempt?