If you bought a new car in 2009, get out your calculator: Your tax deduction choices are more complicated this year.
Here’s why: Under the new economic stimulus law, you can deduct sales and excise taxes attributable to the first $49,500 of the cost of a qualified motor vehicle purchased after Feb. 16, 2009, and before Jan. 1, 2010. But you can’t claim this deduction if you opt for the deduction for general state and local sales taxes instead of deducting state and local income taxes.
In most cases, you’ll come out ahead with the combination of the state income tax and new car sales tax deduction. But that’s not necessarily true if you live in a state with a no or low income tax or if the vehicle costs significantly more than $49,500.
Note also that the new car sales and excise tax deduction phases out for single filers with a MAGI above $125,000, and joint filers above $250,000.
Tip: Use the worksheet on page A-4 of your Form 1040 package, or go online at www.irs.gov, to help figure out your options.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/11180/tax-dilemma-for-new-car-buyers "