New Vehicle Sales Tax Deduction

Here are seven facts about this new tax deduction:

• State and local sales taxes paid on up to $49,500 of the purchase price of qualifying vehicles are deductible.

• Qualified motor vehicles generally include new (not used) cars, light trucks, motor homes and motorcycles.

• Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.

• This deduction can be taken regardless of whether or not you itemize other deductions on your tax return.

• Taxpayers will claim this deduction when filing their 2009 federal income tax return next year.

• The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

• The deduction may not be taken on 2008 tax returns.

Click on the links below for more information:

• IRS YouTube video