Answers re: New Car Purchase Tax Deductions (stimulus)

dbtheo · 02-21-2009, 11:41 AM

Afternoon folks, I know there have been a lot of questions & various threads about the tax deduction stimulus, hopefully this will clear it up for you. Maybe this could be a temporary sticky?

I recieved today the exact info from the CADA on this issue. So, here you go:

- First off, the allowed deduction does NOT include leased vehicles, only to purchased vehicles.

- Next the sales tax deduction is only available to individual taxpayers, not corporations. So if you are planing on doing a company purchase- no deduction for you from this plan.

- The deduction is only applicable to purchases on or after February 17th, 2009 through December 31st 2009.

- You may have read an earlier version of the bill that included federal deductibility of auto loan interest. This provision IS NOT the final bill.

- Motor Vehicle Sales taxes & Motor Vehicle Excise taxes (not applicable in Ohio) are deductible

- Qualifying customers are customers with a modifed AGI of $125k ($25k for joint return).

- Note that a partial deduction is allowable for customers with income greater than $125k but less than $135k ($250 & $260k for joint)

What new vehicles qualify?
- Must be NEW only, passenger car, motorcycle, light duty truck & motor home
- Vehicle weight must be under $8500 pounds gross weight
- Applies to ANY model year, so long as the original use commences with the taxpayer
- Any vehicle sold for under $49,500 qualifies for the full deduction
- For Vehicles sold for more than $49,500 the deduction is limited to tax on the first $49,500 of purchase price

How does the deduction work?
- Deductible as an "above the line" deduction on federal tax return.
- Customer gets the tax benefit even if they can't "itemize" other tax deductions
- Deduction IS allowable for the alternative minimum tax (AMT)

Dave

dbtheo · 02-21-2009, 11:48 AM

The customer is responsible for paying their Ohio (if applicable) Sales Tax at the time of vehicle sale and may realize the benefit described above upon the filing of the 2009 federal tax return in 2010.

I would assume this to be across the board on all states, not just Ohio.

- As side reminder, tax credits are still available for hybrids & diesels.

1013mm · 02-21-2009, 12:11 PM

so what if the car was ordered last october but paid for today?

dbtheo · 02-21-2009, 12:22 PM

Quote:

Originally Posted by jzhang

so what if the car was ordered last october but paid for today?

A car is not considered "sold" until it is paid for

BimmerLearner · 02-21-2009, 01:10 PM

Sooo 800b stimulus and ill get jack.... sweet

ennislaw · 02-21-2009, 05:55 PM

Quote:

Originally Posted by BimmerLearner

Sooo 800b stimulus and ill get jack.... sweet

And the reason?

RockChalk135 · 02-21-2009, 09:10 PM

The reason he gets jack is because he is part of the 2% that pays 98% of all US Taxes, or he "bought" the car at the wrong time.

I still want my money for not being an idiot and buying a house I can't afford.

MadMan77 · 02-21-2009, 09:32 PM

I thought that it would not apply to 2008 purchases and was just looking for proof.

Thanks.

BimmerLearner · 02-22-2009, 09:01 AM

Quote:

Originally Posted by RockChalk135

The reason he gets jack is because he is part of the 2% that pays 98% of all US Taxes, or he "bought" the car at the wrong time.

I still want my money for not being an idiot and buying a house I can't afford.

I did a lease as I couldnt afford a purchase

I have a nice underwater house I get zero help with too... I just get to pay for others.

Big thank you to the OP for the info though.

dbtheo · 02-23-2009, 11:27 AM

lannypoffo · 02-23-2009, 11:54 AM

dood it didnt start jan 1, 2009??? i bought my new truck jan 5th..

dbtheo · 02-26-2009, 11:46 AM

nordique14 · 02-26-2009, 11:56 AM

note for those on the bubble of getting the credit, make sure you contribute to 401k or IRA. that will reduce your AGI. 401k deduction max is $16.5k this year.

Monterra · 02-26-2009, 12:49 PM

Quote:

Originally Posted by nordique14

note for those on the bubble of getting the credit, make sure you contribute to 401k or IRA. that will reduce your AGI. 401k deduction max is $16.5k this year.

+1 excellent point and this is a great time to RAMP UP retirement savings. We may not hold the current bottom but remember that dollar cost averaging and diversification are your friends and things WILL eventually improve.

focusedsketch · 03-01-2009, 10:14 PM

So no luck for 08' buyers? I dropped the check in full in June. Any deductions?

dbtheo · 03-06-2009, 12:01 PM

02-21-2009, 11:41 AM	#1
dbtheo 1addicts CA 82 Rep 1,245 Posts Drives: 2005 330i ZHP cic, 2021 X5 40i Join Date: May 2006 Location: Tampa, Florida iTrader: (0) Garage List 2005 330i cv ZHP [0.00]	Answers re: STIMULUS, New Car Purchase Tax Deduction Afternoon folks, I know there have been a lot of questions & various threads about the tax deduction stimulus, hopefully this will clear it up for you. Maybe this could be a temporary sticky? I recieved today the exact info from the CADA on this issue. So, here you go: - First off, the allowed deduction does NOT include leased vehicles, only to purchased vehicles. - Next the sales tax deduction is only available to individual taxpayers, not corporations. So if you are planing on doing a company purchase- no deduction for you from this plan. - The deduction is only applicable to purchases on or after February 17th, 2009 through December 31st 2009. - You may have read an earlier version of the bill that included federal deductibility of auto loan interest. This provision IS NOT the final bill. - Motor Vehicle Sales taxes & Motor Vehicle Excise taxes (not applicable in Ohio) are deductible - Qualifying customers are customers with a modifed AGI of $125k ($25k for joint return). - Note that a partial deduction is allowable for customers with income greater than $125k but less than $135k ($250 & $260k for joint) What new vehicles qualify? - Must be NEW only, passenger car, motorcycle, light duty truck & motor home - Vehicle weight must be under $8500 pounds gross weight - Applies to ANY model year, so long as the original use commences with the taxpayer - Any vehicle sold for under $49,500 qualifies for the full deduction - For Vehicles sold for more than $49,500 the deduction is limited to tax on the first $49,500 of purchase price How does the deduction work? - Deductible as an "above the line" deduction on federal tax return. - Customer gets the tax benefit even if they can't "itemize" other tax deductions - Deduction IS allowable for the alternative minimum tax (AMT) Dave Last edited by dbtheo; 02-23-2009 at 10:37 AM..
	Appreciate 0 Tweet Quote

02-21-2009, 11:48 AM	#2
dbtheo 1addicts CA 82 Rep 1,245 Posts Drives: 2005 330i ZHP cic, 2021 X5 40i Join Date: May 2006 Location: Tampa, Florida iTrader: (0) Garage List 2005 330i cv ZHP [0.00]	One more thing The customer is responsible for paying their Ohio (if applicable) Sales Tax at the time of vehicle sale and may realize the benefit described above upon the filing of the 2009 federal tax return in 2010. I would assume this to be across the board on all states, not just Ohio. - As side reminder, tax credits are still available for hybrids & diesels.
	Appreciate 0 Quote

02-21-2009, 12:11 PM	#3
1013mm aka 1013MM 1253 Rep 9,545 Posts Drives: pokingly flush Join Date: Jan 2009 Location: Los Angeles / HK iTrader: (7) Garage List 2009 135i [8.26]	so what if the car was ordered last october but paid for today? __________________ -John Project YOSHI Sale Thread
	Appreciate 0 Quote

02-21-2009, 01:10 PM	#5
BimmerLearner My car is less than a week old and on its 3rd tank 12 Rep 379 Posts Drives: Tiag 135 Vert Join Date: Jan 2009 Location: NE iTrader: (0)	Sooo 800b stimulus and ill get jack.... sweet
	Appreciate 0 Quote

02-21-2009, 09:10 PM	#7
RockChalk135 New Member 0 Rep 24 Posts Drives: 135 Coupe, Le Mans, Black Join Date: Mar 2008 Location: Seattle-Area iTrader: (0)	The reason he gets jack is because he is part of the 2% that pays 98% of all US Taxes, or he "bought" the car at the wrong time. I still want my money for not being an idiot and buying a house I can't afford. __________________ March 30th, 2009 ED \| 135 Le Mans-Blue \| Black Boston \| Gray poplar \| Premium \| M-Sport \| Cold Weather \| CAS \| iDrive \| Premium Hi-Fi \| iPod \| HD Radio \| Smart Phone... I hope all this stuff doesn't break :-)
	Appreciate 0 Quote

02-21-2009, 09:32 PM	#8
MadMan77 ↓↓↓ Ex-Con ↓↓↓ 34 Rep 1,874 Posts Drives: Jet Black '08 135i Join Date: Apr 2008 Location: Yigo iTrader: (1)	I thought that it would not apply to 2008 purchases and was just looking for proof. Thanks. __________________
	Appreciate 0 Quote

02-23-2009, 11:27 AM	#10
dbtheo 1addicts CA 82 Rep 1,245 Posts Drives: 2005 330i ZHP cic, 2021 X5 40i Join Date: May 2006 Location: Tampa, Florida iTrader: (0) Garage List 2005 330i cv ZHP [0.00]
	Appreciate 0 Quote

02-23-2009, 11:54 AM	#11
lannypoffo Lieutenant 20 Rep 564 Posts Drives: 2013 Dodge Charger SRT8 Join Date: Aug 2008 Location: Cali iTrader: (1)	dood it didnt start jan 1, 2009??? i bought my new truck jan 5th.. __________________ 2013 VW GTI 2009 Nissan Xterra
	Appreciate 0 Quote

02-26-2009, 11:46 AM	#12
dbtheo 1addicts CA 82 Rep 1,245 Posts Drives: 2005 330i ZHP cic, 2021 X5 40i Join Date: May 2006 Location: Tampa, Florida iTrader: (0) Garage List 2005 330i cv ZHP [0.00]
	Appreciate 0 Quote

02-26-2009, 11:56 AM	#13
nordique14 Major 53 Rep 1,477 Posts Drives: SGM 135i 'vert Join Date: Feb 2008 Location: Sharks Territory iTrader: (5)	note for those on the bubble of getting the credit, make sure you contribute to 401k or IRA. that will reduce your AGI. 401k deduction max is $16.5k this year.
	Appreciate 0 Quote

03-01-2009, 10:14 PM	#15
focusedsketch Private First Class 10 Rep 119 Posts Drives: Join Date: May 2008 iTrader: (0)	So no luck for 08' buyers? I dropped the check in full in June. Any deductions?
	Appreciate 0 Quote

03-06-2009, 12:01 PM	#16
dbtheo 1addicts CA 82 Rep 1,245 Posts Drives: 2005 330i ZHP cic, 2021 X5 40i Join Date: May 2006 Location: Tampa, Florida iTrader: (0) Garage List 2005 330i cv ZHP [0.00]
	Appreciate 0 Quote