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Ask your advocate.

I plan to purchase a car later this year. Can you explain to me the new sales tax deduction for vehicle purchases to relieve consumers who buy cars? How will I benefit from a car purchase?

--R. Sanchez

Pensacola, FL

If you purchase a new car between Feb. 17, 2009 and Dec. 31, 2009, you can claim a state and local sales-tax deduction on your 2009 tax return of up to $49,500 of the purchase price of qualifying vehicles. This deduction is part of the American Recovery and Reinvestment Act of 2009 (commonly referred to as the economic stimulus bill or package), which was signed by President Obama on Feb. 17, 2009. Vehicles that qualify include cars, light trucks, motor homes, and motorcycles. You didn't specify whether you are buying a new or used car, but be aware that used vehicles are not eligible. You can claim this deduction regardless of whether you itemize your deductions or claim the standard deduction. Know that the amount of the deduction will be phased out if modified adjusted gross income is between $125,000 and $135,000 for individuals and between $250,000 and $260,000 for joint fliers. Learn more about this deduction by visiting the Internal Revenue Service Website (

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Title Annotation:QA; tax deduction from buying a car
Author:McRae, Sheiresa
Publication:Black Enterprise
Article Type:Brief article
Geographic Code:1USA
Date:Aug 1, 2009
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