I gave up my car two years ago because I was so very
frustrated with all the costly repairs that were needed just to keep it on the
road. And, I couldn’t imagine
paying the escalating gas prices, which at the time topped $1.08/gallon. When I relocated and decided to build
my life in NY, I was happy, elated even, and intensely ecstatic about the idea
of not having the responsibility of maintaining a vehicle. But now, I’m having seller’s
remorse. I don’t miss the old car
per se, I miss the lack of mobility.
I miss not being able to go away for the weekend on the drop of a dime
without having to prearrange an expensive NY car rental. If I could afford it, I would much
prefer a new car. This way I could avoid all the costly repairs.
Buying a new car now, however, is not a serious
consideration. In fact, as filthy
as the NY subway may be it allows me to remain within budget, avoiding
unexpected expenses and the fluctuation in gas prices that can drive any penny
pincher crazy. For those who may
not live in NYC or require a car for other reasons and are able to squeeze the
expense into their budge, I envy you.
I envy you not only because of the simple luxury of being hidden from
the slush and snow as you careen through the state highways and city streets
but also because if you happened to purchase your car in 2009 anytime before
January 1, 2010 you also may benefit financially when you file your tax return
and claim the New Vehicle Sales and Excise Tax Deduction.
You’re probably wondering how this works, right? Well, below, I’ve presented a few tips
provided by the IRS to help you take advantage of this special tax deduction,
if you fit the eligibility criteria.
State and local sales and excise taxes paid on
up to $49,500 of the purchase price of each qualifying vehicle are deductible.
Qualified motor vehicles generally include new
cars, light trucks, motor homes and motorcycles.
To qualify for the deduction, the new cars,
light trucks and motorcycle must weigh 8,500 pounds or less. New motor homes are not subject to the
Purchase must occur after February 16, 2009, and
before January 1, 2010.
Purchases made in states without a sales tax
(i.e. Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon – may also
qualify for the deduction.
Taxpayers in these states may be entitled to deduct other qualifying
fees or taxes imposed by the state or local government. The fees or taxes that qualify must be
assessed on the purchase of the vehicle and must be based on the vehicle’s
sales price or as a per unit fee.
This deduction can be taken regardless of
whether the buyers itemize their deductions or choose the standard
deduction. Taxpayers who do not
itemize will add this additional amount to the standard deduction on their 2009
The amount of the deduction is phased out for
taxpayers who’s modified adjusted gross income is between $125,000 and $135,000
for individual filers and between $250,000 and $260,000 for joint filers.
Taxpayers who do not itemize must complete Schedule
L, Standard Deduction for Certain Filers to claim the deduction.
If you need more information about the New Vehicle Sales and
Excise Tax Deduction, please visit the IRS website at www.irs.gov/recovery or search for the
instruction video “Vehicle Tax Deduction–Claim It” on YouTube in English and/or
February 11, 2010