Sales Tax deduction

[Peter_Krynicki]

My salesman told me today that as part of the stimulus package, the sales tax on a new motorcycle (and probably a car, etc.) is deductable on the 2009 Fereral income tax. There should be a separate line on the form. Don't know start / stop dates.

[85801]

that's true in california. i'll let my tax guy worry where to put it.

[jforgo]

Sales tax was deductible last year, and the year before. The catch is, you can deduct sales tax or income tax. Not both.

[dancogan]

From the IRS website:

"The American Recovery and Reinvestment Act permits taxpayers to take a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles. The deduction is available on new vehicles purchased from Feb. 17, 2009, through Dec. 31, 2009. In states that don't have a sales tax, the law provides a deduction for other taxes or fees paid. This deduction is available whether or not a taxpayer itemizes deductions on Schedule A.

The deduction is limited to the taxes and fees paid on up to $49,500 of the purchase price of an eligible vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify."