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Omaha Steve Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jun-13-09 08:47 AM
Original message
Stimulus new car tax break questions

Does anyone know off the top of their head if it is a deduction or credit? And how much is it on qualifying cars? What is the amount needed to qualify?

Thanks.

OS

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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jun-13-09 09:04 AM
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1. It's a sales & excise tax deduction
You deduct it when you file next year. You have to make less than $250,000 for a family, something in that neighborhood which I think you will squeak in there, hehe.
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Omaha Steve Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jun-14-09 05:49 AM
Response to Reply #1
3. oh ya

No problem on the income limit.

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customerserviceguy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jun-13-09 09:52 AM
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2. It is definitely a deduction.
And since it is what they call an "above the line" deduction, that means it is an adjustment to income, one need not have enough traditional 'itemized' deductions in order to get a benefit. While it disappears after $260K (for married couples, singles are half that), it starts to phase out at $250K (again, half that for singles).

You are limited to sales taxes (or other sales-based transfer taxes in states that have no sales tax) and excise taxes, but only as they relate to the first $49,500 of vehicle value, and the vehicle has to be new, not just new-to-you.

There are gray areas, such as if you buy a dealer demo, or if a married couple buys two cars. In any case, all it means is that the money you plunk down for local government for tax in this instance will not be double-taxed by the Federal government as well. That's a nice concept, I'd sure like to not have to pay Federal income tax on the money that is coming out of my paycheck for Social Security taxes.
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