OTHER NEWS
Special sales tax deduction for car puchases available through 2009

With 2010 models arriving in dealer showrooms, the Internal Revenue Service reminds taxpayers that purchasing a new car, light truck, motor home or motorcycle could qualify them for a special deduction for the state and local sales and excise taxes on their 2009 tax returns.

Purchases made before Jan. 1, 2010, will qualify for this deduction under the American Recovery & Reinvestment Act of 2009 (ARRA).

The deduction is limited to the sales and excise tax and similar fees paid on up to $49,000 of the purchase price of a new vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes between $250,000 and $260,000 and other taxpayers with modified adjusted gross income between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.

Taxpayers who make qualifying new vehicle purchases this year can estimate the deduction with the help of Worksheet 10 in IRS Publication 919-How do I Adjust My Withholding? The special deduction is available regardless of whether taxpayers itemize deductions on their returns. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return.

For more information about the deduction for sales tax and other fees, visit www.irs.gov.