Special Tax Deduction For State and Local Sales and Excise Taxes

For those individuals that purchased 2010 autos andtaxes and similar fees paid for a vehicle limited to
vehicles, and with tax season around the corner, you$49,500 of the purchase price of a new vehicle. The
should be aware that purchasing a new (not used) car,deduction will be reduced for joint filers with modified
light truck, motor home or motorcycle that had a grossadjusted gross incomes (MAGI) from $250,000 to
vehicle weight rating of less than 8,500 pounds, and$260,000 and other taxpayers with MAGI ranges from
paying state and local sales and excise taxes, may$125,000 to $135,000. Unfortunately, if you income is
qualify you for a special deduction when filing yourgreater than what is reflected above, then you will not
2009 tax returns.qualify.
Explanation of How this Deduction Can Help You -ThisThere is some good news, the deduction is available
deduction can be taken regardless of whether or notwhether or not you itemize deductions on your tax
you itemize other deductions on your tax return.return. If you are unable to itemize, then you can add
Purchases made before January 1, 2010, may qualifythis additional amount to the standard deduction on
for this deduction under the American Recovery2009 tax return. In addition, to use this special
& Reinvestment Act of 2009. A qualified motordeduction, your must file either Form 1040 or Form
vehicle includes a passenger automobile, light truck, or1040A. It is unavailable to individuals who use Form
motorcycle, the original use of which, begins with that1040EZ.
purchaser, and has a gross vehicle weight rating ofIf you regularly use From 1040EZ then you should [Tax
8,500 pounds or less. Purchases must occur afterTip] consider using and filing Form 1040 or Form 1040A
February 16, 2009 and before January 1, 2010.instead of Form 1040EZ to obtain the benefit of this
This special deduction is limited to sales and excisededuction.