Tuesday, July 28, 2009

IRS takes a pro-taxpayer view on the sales tax deduction on new vehicles.

Buyers can deduct the sales tax paid on more than one vehicle this year, according to IRS officials. Although this break applies only to the tax on the first $49,500 of the cost for the vehicle purchased after February 16, 2009 and before January 1, 2010, IRS will apply the cap to each individual car purchased. So if you buy two cars for $30,000 apiece, total sales tax paid on the vehicles qualify for the break.

Buyers living in states with no sales tax can claim this break, says IRS. They can deduct other related fees imposed by states and municipalities if the levies are assessed on purchasing a vehicle and are based upon the vehicle’s sales price.

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