Recently, the IRS announced that the new car tax deduction is available for taxpayers in states with no sales tax as long as the requirements of time period and income limitation meet. These states include Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon.
Taxpayers are entitled to deduct other fees or taxes imposed by the state or local government. The qualified fees or taxes must be assessed on the purchase of the vehicle and must be based on the vehicle’s sales price or as a per unit fee.
The deduction is available even if the taxpayer takes standard deduction instead of itemize deduction. However, taxpayer will lose the deduction if he takes state and local sale tax deduction in lieu of state and local income taxes. Also, keep in mind that the deduction can only be taken on 2009 tax returns but 2008 returns. Check out my last post to see the requirement for this new car sales tax deduction.
Taxpayers are entitled to deduct other fees or taxes imposed by the state or local government. The qualified fees or taxes must be assessed on the purchase of the vehicle and must be based on the vehicle’s sales price or as a per unit fee.
The deduction is available even if the taxpayer takes standard deduction instead of itemize deduction. However, taxpayer will lose the deduction if he takes state and local sale tax deduction in lieu of state and local income taxes. Also, keep in mind that the deduction can only be taken on 2009 tax returns but 2008 returns. Check out my last post to see the requirement for this new car sales tax deduction.
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