Sales Tax Deduction

In 2009 there is a chance to take the sales tax on large purchases as a deduction. Vehicles that qualify for this tax break are new cars, light trucks, motor homes, and motorcycles. Only new vehicles are eligible, not pre-owned, and they must have been purchased between February 17th, 2009 and December 31st, 2009.

Most taxpayers are not able to take advantage of the sales tax deduction because they do not have enough expenses to itemize. This is the best part of the 2009 sales tax deduction, it is available whether you choose to itemize or not. Now you may be saying, “There isn’t any sales tax where I live, how does this help me?” In states like Montana, Oregon, and Alaska this is true, but in cases such as these the IRS has allowed other fees and taxes to be deducted in place of the sales tax on a purchase. These fees or taxes must be assessed on the vehicle you buy, and need to be based on its sales price. There are limits to how much sales tax you can take as a deduction as well as a cap on the income you can earn and still take advantage of the deduction.

To learn more and see a video on the deduction go to http://www.irs.gov/newsroom/article/0,,id=204519,00.html