You May Be Able to Deduct Taxes Paid for A New Car

If you purchased a new car between February 17, 2009 and December 31, 2009, you may be able to deduct the state and local sales or excise taxes paid.  The deduction is available for the purchase of a new car, light truck, or motorcycle with a gross vehicle weight rating up to 8,500 pounds, as well as motor homes of any weight.  Taxpayers who purchased more than one vehicle can deduct taxes for all qualifying vehicles, subject to the price limit and phaseout rules.

The deduction is only available for taxes paid on purchases up to $49,500. If the purchase amount exceeds this, then only the amount of taxes paid on the first $49,500 can be deducted.  As usual there are income limitations and phase-out rules. For taxpayers whose modified adjusted gross income exceeds $125,000 ($250,000 for married taxpayers filing jointly) the deduction begins to phase out over a $10,000 range. There is no deduction available for taxpayers with a modified adjusted gross income exceeding $135,00 ($260,000 for married taxpayers filing jointly).

At HLB Gross Collins, P.C. we are committed to helping our clients minimize the tax bite each year by identifying all eligible deductions and planning opportunities. Contact your HLB Gross Collins, P.C. representative to assist you with your tax planning and preparation needs.

Contact Us!

Contact Us