How to Enjoy Auto Tax Incentives Awarded by the Economic Stimulus Bill

Whether you’re for or against the stimulus bill, there’s no doubt that the tax incentives for purchasing a new car will come in handy. If you’re looking to buy a new car in 2009, you can take advantage of the tax incentives. However, before you run out to buy a new car, make sure you fit the stimulus bill tax incentives as laid out in the American Recovery and Reinvestment act of 2009 signed by President Obama.

Difficulty: Moderate

Instructions

1. Satisfy the adjusted income gross income level. If you adjusted gross income $125,000 or less as an individual or $250,000 or less filing as a couple, then you qualify for the tax deduction outlined in the Recovery and Reinvestment stimulus bill.

2. Determine which taxes are deductible. The bill allows for both local and state motor vehicle taxes to be entirely deducted on your Federal taxes. In addition to the state and local tax incentives, you may also deduct applicable motor vehicle excise taxes.

3. Purchase a new car within the allotted time frame. You must purchase the new vehicle between the time of frame of February 17, 2009 and December 31, 2009 in order to qualify for the tax benefit.

4. Make sure you purchase a vehicle that qualifies for the deduction. The vehicle but must be brand-new and under 8,500 pounds gross vehicle weight. Vehicles costing less than $49,500, may take the full tax deduction. On vehicles costing more than $49,500, consumers can deduct the sales tax applicable to the first $49,500 value of the vehicle.

Tips & Warnings

• For more information on the particulars of the American Recovery and Reinvestment act of 2009 and the tax incentives that pertain to the purchase of new automobiles, visit the National Automobile Dealers Association (www.nada.org).

Resources

• NADA.org

[bar10dr98]

on 2/26/2009 This is going to help a lot of people!