The American Recovery and Reinvestment Act Provides Tax Relief with Sales Tax Deduction for New Vehicle Purchases
This is another tax relief aspect created by the American Recovery and Reinvestment Act of 2009. It does not directly relate to IC compliance or other labor law areas, but it’s worth knowing about.
However, this deduction applies if you’re an employee or an independent contractor. It doesn’t matter if you use the vehicle for personal, business, or for both.
Buy a new car, or other vehicle, and take a deduction on your federal income taxes.
The American Recovery and Reinvestment Act of 2009 provides a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles between February 17, 2009 through the end of 2009. The deduction is available regardless of whether a taxpayer itemizes deductions on Schedule A or not.
Purchases made before February 17, 2009, are not eligible for this special deduction.
The deduction is limited to the tax on up to $49,500 of the purchase price of an eligible motor vehicle. The deduction is phased out for taxpayers with adjusted gross income in excess of $125,000 ($250,000 in the case of a joint return).
You will be able to take this deduction on your 2009 personal income taxes when you file your Form 1040 next year.
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