Tuesday, Mar. 24, 2009
Take Advantage of Tax Breaks on New Cars
It may pay to buy a new car. Here's a small but largely unpublicized aspect of the government's automaker-bailout plan: sales and excise taxes are deductible on any new vehicle purchased between Feb. 17 and Dec. 31, 2009. The vehicle price cannot be more than $49,500; if it is, there is no deduction for the taxes attributed to the portion of the purchase price over that limit. This benefit phases out for singles with more than $125,000 in income and for couples with more than $250,000. The original bill included a deduction for car-loan interest as well. "The government really wants you to go out and buy a car," says Leonard Wright, an accountant in San Diego. "I was surprised when they pulled the interest deduction."