My Personal Finance Blog

Under the American Recovery and Reinvestment Act, enacted February 17, 2009, taxpayers who buy a new vehicle this year can deduct state or local sales taxes paid on the purchase.  Unlike any other itemized deduction for taxes, AMT payers also are eligible for this break.

A problem, however, is that individuals in states without a sales tax — such as Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon — get no benefit from this change, simply because they are not paying a deductible tax as defined in the law.

Now, in a major policy change benefiting folks in these states, the IRS has issued a notice allowing this deduction for “other fees or taxes” paid on automobile purchases.  Here is the text of the notice:

WASHINGTON —The Internal Revenue Service and Treasury Department today announced that a tax break for the purchase of new motor vehicles is available in states that do not have a state sales tax. Under the American Recovery and Reinvestment Act of 2009, taxpayers who buy a new motor vehicle this year are entitled to deduct state or local sales or excise taxes paid on the purchase.

The IRS and Treasury have determined that purchases made in states without a sales tax — such as Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon —can also qualify for the deduction.

The IRS said today that taxpayers who purchase a new motor vehicle in states that do not have state sales taxes are entitled to deduct other fees or taxes imposed by the state or local government. The fees or taxes that qualify must be assessed on the purchase of the vehicle and must be based on the vehicle’s sales price or as a per unit fee. According to the IRS, Congress intended for these fees or taxes to qualify for this special tax deduction.

“This special tax break is available for people purchasing a new car this year, and that can include people in states without a sales tax,” said IRS Commissioner Doug Shulman. “This means that more people can take advantage of this deduction when they file their tax returns next year.”

To qualify for this deduction, the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010. Taxpayers can claim this special deduction only on their 2009 tax returns to be filed next year.

The deduction is limited to the fees or taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle.

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.

The special deduction is available regardless of whether taxpayers itemize deductions on their returns. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return. The IRS reminded taxpayers the deduction may not be taken on 2008 returns.

George Bauernfeind is with AMT Individual – providing information on Alternative Minimum Tax Planning . He writes articles to help the tax payers to pay less Alternative Minimum Tax. He recommend to use Alternative Minimum Tax Calculator to reduce Alternative Minimum Tax.

Our cars provide us with convenient ways to get where we need and want to go. We usually choose a car that looks good and that more importantly is safe. We want our car to protect us in case we are unfortunately involved in a car accident. In order for our car to do its job it needs to be in good condition inside and out. For example, there are many cars on the road today that need bumper repair. Bumper repair is one of the most common auto body repairs that are needed right now. However it is also an important repair if you want your cars bumper to keep doing its job!

Your front and rear bumpers job is to protect you and your engine. In checking the definition of Bumper you will see what it is and what its function really is. It is usually a metal, plastic or rubber bar attached to either end of a motor vehicle to absorb impact in a collision, also it serves as a protective device for absorbing shock or impeding contact. However if it is not in good condition it will not be able to do its job. If your car was in any form of accident and the bumper needs repair, it is most likely weak. This means if you were in an accident it would not be able to fully do its job of protecting you and the people who ride in your vehicle since it is not strong enough. If this is the case you need to get your bumper repaired. It has an important job function in your overall vehicle safety, which is important to everyone.

Getting your bumper repaired is not a big deal. Keep in mind that some dealerships or even independent auto body shops may tell you that you need to replace your bumper. However with modern techniques and skill this can usually be avoided. If you replace your bumper rather than repair it, you will be paying quite a bit more. Also, it will take more time since you will have to wait for them to order the bumper and supplies, wait for it to arrive at their shop, and wait for them to have time to complete the replacement. On the other hand bumper repair can usually be done in about two or three hours. Sometimes if you find an auto body shop with great service they may offer to repair your bumper while you are at home or work, this can be very convenient. Choosing to repair your vehicles bumper will save you time and money, two very important things to us all! An added bonus is that you can’t even tell that you had a bad bumper when your bumper is repaired, it looks like new!

So, since bumper repair is not going to drain your wallet or your free time you should find a professional to get your bumper in great condition so it can do its job. After it’s said and done you will have a safer vehicle and it will look great too!

If your car is in need of auto reconditioning start looking for a qualified professional to handle your concerns. Look for an auto body professional to take care of your ride from bumper repair to fixing the major auto body repairs.