The final bill will, in fact, include a tax deduction for new car purchases for non-hybrids. The car has to cost less than $49,500, but the bill, officially called “Auto Ownership Tax Assistance Amendment,” allows new-car buyers to deduct sales and excise taxes at the end of the year. President Barack Obama is scheduled to sign the stimulus bill today.
The tax deduction isn’t as large as initially proposed, resulting in fewer savings. According to a KickingTires article about the new bill:
“Still, the tax breaks will be worth only $395 to a family making $100,000 in combined income when purchasing a $23,000 vehicle. In [Sen. Barbara] Mikulski’s original bill, the savings would have been roughly $1,460 because interest payments would also have been deductible.”
Before the stimulus bill, tax credits were only available for alternative fuel technology like hybrid, natural gas and diesel vehicles.
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Ironic that the new car tax deduction ( http://www.savingtoinvest.com/2009/02/car-buyer-tax-breaks-in-obama-economic.html ) comes at a time when the US car industry is on the brink of collapse. A little too late...
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I am wondering if one can write off the new purchase that was made this year in last year's tax (before april 15) or now needs to wait till next year's filing?