Purchase your dream car and save on 2009 taxes

04.05.09
By Lewis Green

Just when you may have been agonizing over financial issues such as bills, credit reports and taxes, the IRS offers a bit of good news.

Buying that new car may become less of a budget strain in the long run. Taxpayers who purchase a new vehicle this year can be entitled to extra deductions for state and local sales and excise taxes paid on the vehicle when filing 2009 tax returns.

The purchase must be made between February 16th, 2009 and January 1st, 2010 in order to qualify. Acceptable vehicles include small cars, motorhomes, light trucks or motorcycles.

"This deduction enables taxpayers to buy now and get cash back later on their tax returns," commented IRS commissioner Doug Shulman. However, the deduction cannot be applied to 2008 returns and is limited to sales and excise taxes paid on up to $49,500 of the auto's cost.

Even better, new figures reveal that many of you are taking extra care with your 2008 taxes. According to the IRS, more than 138 million taxpayers visited the IRS home page, as of March 31st, 2009. This number has risen by 111 million from last year - an increase of 24 percent.

This year, the IRS improved its website design with updated FAQ pages, one of which helps those suffering from the recession, and the site includes more user-friendly hyperlinks throughout.

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Consumers may see tax credit when purchasing a new car