The bright spot of the dreary 2009 economy: savings for everyone.
If you bought a new car, light truck, motor home, or motorcycle after Feb. 16, 2009, you can deduct the sales taxes you paid on up to $49,500 of the vehicle's price. You don't need to itemize to take this special one-year write-off -- making it especially valuable for high earners who typically have their itemized deductions clipped or who might otherwise get hit by the alternative minimum tax (AMT). Traded in a junker through the Cash for Clunkers program? Lucky you, you can take this break too.
If you normally opt to deduct your sales taxes in lieu of state and local taxes on your Schedule A -- a choice made by many people in low-income tax states -- you would have been allowed to write off auto sales taxes anyway. But you should run the numbers to see if you'd be better off using this new provision vs. itemizing, as many itemized deductions are subject to being added back in with the AMT.
Full break up to $250,000
Partial break up to $260,000
Potential savings: $420 on a $30,000 car in a state with a sales tax of 5%
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Last updated March 26 2010: 7:15 PM ET
Savings assumed a couple filing jointly in the 28% bracket, unless otherwise noted.