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Posts tagged ‘vehicle’

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Autos Purchased in 2009

2009 September 25
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The “Cash for Clunkers” program this summer was a big hit with consumers. Today the Department of Transportation announced that almost 700,000 cars were purchased under the program, netting consumers credits of $3400 – $4500 off the purchase price with no federal tax consequence. In most states, the sales tax was charged on the full price of the automobile, before the credit was applied. This was not popular with some buyers who viewed the credit as a reduction in the price of the auto, rather than as a government assist in paying the full price of the car.

In any event, sales and excise tax on new automobiles has long been a deductible item on Schedule A for those eligible to itemize. The great news is, for new vehicles purchased between 17 February and 31 December 2009, these taxes may be deductible, even for those who do not itemize. The deduction is limited to taxes paid on vehicles valued up to $49,500; it is phased out for high income taxpayers.

Taxpayers living in states with no sales tax, such as Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon, can deduct “fees or taxes … assessed on the purchase of the vehicle and … based on the vehicle’s sales price or as a per unit fee.”

IRS Features Recovery Tax Credits on YouTube, iTunes

2009 August 24
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Last Friday the IRS announced a YouTube video site and an iTunes IRS podcast site covering the American Recovery and Reinvestment Act of 2009 (the stimulus package).

Subjects covered include

  • IRS Undelivered Refunds & Economic Stimulus Payments 2008
  • IRS Tax Breaks for 2009-2010
  • IRS Vehicle Tax Deductions
  • Home Energy Tax Credits
  • Dirty Dozen – 12 Common Tax Scams
  • Education Tax Credit