The American Recovery and Reinvestment Act of 2009 provides that for vehicles purchased on or after February 17, 2009 and before January 1, 2010 you can deduct, as an itemized deduction or as an addition to the standard deduction, sales taxes on the purchase of a qualifying new vehicle -- on the first $49,500 of the purchase price. Qualifying vehicles include the following.
- A passenger car, light truck, or motorcycle the gross vehicle weight rating of which is not more than 8,500 pounds.
- A motorhome.
Not only is this deduction allowed for your regular income taxes, it also is allowed for those dreaded alternative minimum taxes (AMT). Although neither taxes paid nor the standard deduction are generally allowed as a deduction for AMT purposes, these sales taxes are.
Of course, as with so many of our tax rules, as your income increases your benefits from this deduction decrease or go away entirely as your income goes up. The deduction is phased out if your gross income is over $125,000 for single filers or $250,000 for joint filers. It is eliminated entirely if your gross income is over $135,000 for single filers or $260,000 for joint filers.
Did you purchase more than one new vehicle? No problem, you can take the deduction for as many qualifying new vehicles as you may have purchased during the period. How's that for a deal.
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