During a press conference explaining his plans for the automotive industry on Monday, the Los Angeles Times reports, President Obama"said the Internal Revenue Service would start a campaign to tell consumers of an existing program that could save buyers ‘hundreds of dollars and lead to as many as 100,000 new car sales.'" The announcement took many by surprise. Obama indicated that the program was already in place, but many were not aware of its existence. The Time reports, however, that the plan was "passed as part of the federal stimulus package" earlier this year.
Autoblog reports, "The new tax deduction will be made available for those filing their taxes individually with adjusted gross incomes less than $125,000 or for joint filers with adjusted gross incomes of less than $250,000. Any new automobile, truck, motor home or motorcycle with a purchase price of $49,500 or less will be eligible for the deduction."
While Autoblog reports that the deduction applies only to vehicles with a purchase price under $49,500, Kicking Tires has a different interpretation. They write, "The deduction is only good for the taxes paid on a vehicle up to $49,500 of the purchase price. So if you buy a $70,000 car, you won't be able to deduct the taxes for the additional $20,500."
Consumerist notes, "The vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010, and the deduction cannot be taken on your 2008 returns."
Kicking Tires notes that the Feb. 16 start date means "the law is retroactive, so if you purchased a car after Feb. 16, this is a bit of good luck for you."
If you're in the market for a new car, check out the US News rankings of this year's best cars as well as this month's best car deals.
