New Vehicle Sales Tax is Now Deductible on your Federal Income Tax Return!

The Federal Economic Stimulus Package that became law on February 17, 2009 allows for the deductibility of vehicle sales tax (i.e. titling tax).

Example:
If you purchase a $30,000 vehicle at 6% tax, you can deduct $1,800.00 on your Federal income tax return (even if you do not itemize).

What Customers Qualify for the Deduction?

Individual customers with modified adjusted gross income of less than $125,000 or joint-filers making less than $250,000 a year in 2009 qualify for the deduction. This is an “above the line” deduction (for itemizers and non-itemizers) on your Federal tax return.

Effective Dates:
Any new vehicle purchased from February 17, 2009 through December 31, 2009 – this incentive is NOT retroactive.

What New Vehicles Qualify for the Deduction?

Any new vehicle under 8,500 pounds gross vehicle weight qualifies. Any vehicle sold for under $49,500 qualifies for the full deduction. Consumers may deduct sales taxes on the first $49,500 of any vehicle sold above this price. 

Please contact Criswell HUMMER if you have additional questions and consult your tax advisor.

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