How does the tax break on new cars bought in 2009 work?
March 22nd, 2010 | by admin |The tax break on new cars purchased between 2-16-09 and 1-1-10 is good but does it reduce the taxable income or the tax owed?.
It reduces your income by the sales tax paid.
Helen,EA in PA
4 Responses to “How does the tax break on new cars bought in 2009 work?”
By Helen, EA in PA on Mar 22, 2010 | Reply
It reduces your income by the sales tax paid.
Helen,EA in PA
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By jlf on Mar 22, 2010 | Reply
The state sales tax you paid is deductible from your taxable income for 2009.
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By Judy on Mar 22, 2010 | Reply
You can deduct sales tax even if you don’t itemize, so if you take a standard deduction it reduces the taxable income which in turn reduces the tax owed. If you paid $500 sales tax and are in a 15% tax bracket it would reduce your tax by $75.
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By chatsplas on Mar 22, 2010 | Reply
Cash for Clunkers has NO tax impact.
Sales tax paid may be deductible for you.
References :
tax pro