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Shift gears on new-vehicle deduction

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in Small Business Tax

Do you live in a state without a sales tax? You can still benefit from the new deduction for sales and excise taxes attributable up to $49,500 of a new vehicle’s cost.

The IRS now says you can deduct other fees or taxes imposed by a state or local government on a vehicle’s sales price or as a per-unit fee. (IRS News Release IR-2009-60)

Reminder: The deduction begins to phase out if your modified adjusted gross income (MAGI) exceeds $125,000, or $250,000 for joint filers. 

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