Tax incentive to purchase a new car

In hopes of spurring the overall economy in general, and the automobile industry in particular, the recently enacted “American Recovery and Reinvestment Act of 2009” includes a new tax break for purchasers of new cars: a deduction for state and local sales and excise taxes paid on new vehicle purchases.

This new tax deduction for sales tax:

• Applies to purchases of passenger cars, minivans, light trucks, motorcycles, and motor homes, but it only applies on $49,500 of the vehicle's price and it only applies to new vehicles.
• Applies for new vehicles purchased between Feb. 17, 2009 and the end of 2009.
• Is available even if you do not itemize your deductions.
• Is not available for couples who earn over $260,000 or individuals who earn over $135,000 in 2009.