The government is famous for modifying our behavior through financial incentives. With this in mind, you can now get a big tax break if you buy a new car. On the off hand chance you've been in a coma the last year or so, let me mention that the economy has seen its shadow, screamed in terror and crawled down into a hole in the ground where it is hiding and refusing to come out! Yep, things are bad.
In an effort to get the economy to come out of that hole, President Obama has pushed various fiscal stimulus packages through Congress. The largest package included a host of financial incentives to get people to start spending again. One has to do with buying a new car and it is a very nice incentive indeed.
GM, Ford, Chrysler and other car brands are getting crushed in the current economic turmoil. Car sales are dead in the water. To help these companies out, the government is giving you and me an incentive to get out there and buy a car. As long as we buy a new car before the end of the 2009 year, we can deduct the sales tax we pay on our federal taxes.
Sales tax generally isn't a big deal with most purchases, but vehicles are different. The reason? The price involved. When you buy a car, you are paying tens of thousands of dollars. Depending on the sales tax rate in your state, this means the cost can add up very quickly. That makes for a very nice deduction.
As with most tax subjects, there are some limitations you need to know. First, you can only deduct sales tax up to $49,500 of the sales price. If the car costs $60,000, only the sales tax applicable to the first $49,500 can be written off. There is also a limit on the amount of money you make. You can claim the deduction so long as you have an adjusted gross income of less than $125,000 as a single filer. The figure pops up to $250,000 for joint filers. If your adjusted gross income is above these figures, then deduction slowly phases out depending on how much you actually make.
It is a great time to buy a car if you can afford it. The dealers are desperate to move them, so there are some incredibly deals to be had. Add the sales tax deduction to this and you have one heck of a deal!
Dirk Gibson writes about high performance car parts for the online parts site DCJAutoParts.com.
Article Source: http://EzineArticles.com/?expert=Dirk_Gibson
No comments:
Post a Comment