Still Time to Get a Car & a Tax Break for 2009

It's not too late to purchase a new car, light truck, motorcycle, or even a motor home and qualify for a special deduction of the state and local sales excise taxes on your 2009 returns. Additionally, purchases made before January 1, 2010 will qualify for a deduction under the American Recovery and Reinvestment Act of 2009.

The Catch: Limitations and Rules

- This deduction is limited to the sales and excise taxes and similar fees paid for the vehicle.

- The amount is up to $49,500 of the purchase price of the vehicle.

- The Deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $135,000.

- Taxpayers with "higher" incomes do not qualify.

How to Claim the Deduction

Use Worksheet 10 in IRS Publication 919, How Do I Adjust My Withholding? Lines 10a to 10k of the worksheet will show you how to claim purchases above the $49,5000 limit, as well as reduced deductions for taxpayers at higher income levels.

You do not need to itemize your deductions to claim it. If you choose not to, simply add this additional amount to your standard deduction on your 2009 tax return.