BMW of New London

Tax Deduction for New Car Purchases in 2009

March, 2009 - The Internal Revenue Service announced today that taxpayers who buy a new passenger vehicle this year may be entitled to deduct state and local sales and excise taxes paid on the purchase on their 2009 tax returns next year.

IRS Commissioner Doug Shulman was quoted as saying "For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year. At BMW of New London not only will you be entitled to this tax deduction, you will be entitled to the lowest financing offers available on our all new BMWcars, and light trucks.

This deduction enables taxpayers to buy now and get cash back later on their tax returns." The new deduction applies to state and local sales and excise taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle. The qualifying vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010 to secure the deduction. Application is to new passenger cars or light trucks with a GVW rating of not more than 8500 pounds.

The announcement noted that the amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers. This special deduction is made available to car buyers regardless of whether a taxpayer itemizes deductions on their return.

For additional information on this new car tax deduction, or items disclosed in this tax advisory, please remember to consult with your tax advisor. You may also contact the Dealer Services Group at dsg@dixon-hughes.com or via phone at (877) DLR-CPAS.