For many, the recent downturn in the economy has forced cutbacks; people are anxious to save money wherever they can.
If you're among this frugal population and have been considering buying a new car, a new auto tax deduction means that there might be no time like the present.
This auto tax deduction is part of the American Reinvestment and Recovery Act (i.
e.
, the Federal Stimulus Bill), and only applies to cars purchased between February 17, 2009 and December 31, 2009.
Originally conceived in the form of a credit, the final legislation turned this economic relief effort into a deduction.
Regardless, it could result in significantly more money in your pocket.
Your ability to take advantage of this new auto tax deduction might vary: while the vast majority of cars, motorcycles, light trucks, motor homes, SUV's and RV's are eligible, those weighing more than 8500 pounds (4.
25 tons) are not.
Among those too hefty for to meet this stipulation are Hummer's H1 and 2 (though not the H3), as well as virtually all military-grade tanks.
Your income is also a factor in your ability to take advantage of the new auto tax deduction.
All of those potential buyers with incomes below 125,000 (if filing singly) or 250,000 (if filing jointly) are eligible.
Those with incomes of above 135,000 (again, if filing singly) or 260,000 (jointly) do not qualify for this credit.
If your singly filed income is from 125-135,000, or your jointly filed income is from 250-260,000, the amount of the deduction will be phased out as your income increases.
Via these guidelines, most Americans are eligible for this deduction.
While this new auto tax deduction is not available to businesses, those individuals or families looking to purchase a car without breaking their budgets should consider it carefully.
Don't take too much time considering, though - in order for cars to be eligible for the new auto tax deduction, they have to have been purchased before December 31, 2009!