Personal Taxes

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New deduction for sales taxes on a new car purchase

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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.

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Stimulus Plan Tax Highlights

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You don't live "off the grid," so you know that last month President Obama signed the "American Recovery and Reinvestment Act." While much of the news focuses on the spending provisions, it also includes $287 billion in tax cuts.

I’m writing this week to make sure you don’t miss any of the highlights. Here are the most important provisions:

  • A new refundable "Making Work Pay" credit for 2009-2010 to offset the first $400 of Social Security tax you pay ($800 for joint filers). It phases out as your "adjusted gross income" (AGI) tops $75,000 ($150,000 for joint filers).