TAXING FORWARD: Tax Deduction Aimed At New Car Buyers

If you buy a new car this year, there could be a tax deduction down the road for you.

“You have the opportunity to offset some of the cost of buying a new car by deducting the sales tax you pay for buying the new vehicle,” according to Raphael Tulino with the Internal Revenue Service.

You can deduct the sales tax on the car next year when you file your federal return as long as you qualify.

The car must be under $49,500.

If it’s worth more than that,you can only deduct the sales tax up to that amount.

Your income must be less than $125,000 for single taxpayers or $250,000 if you are married and file jointly.

The tax deduction is good for any new car bought this year between February 16th and December 31st.

You also have an opportunity to cash in if you buy a new hybrid.

The IRS is offering a tax credit for qualified hybrids, which could translate into thousands of dollars come tax time next year.

Go to www.irs.govfor more information on which hybrid vehicles qualify for the tax credit.