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New car tax credit

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Here are your tasty tips to save money on tax credit when one buying a new car. It’s important to know how it work and find the best way to save tax credit when buying a new car. Here we will show you how the car tax credit works for any new cars. It is important to understand how it works before you purchase a car. These tips will help you save some money from your buying.

There are few important things to know about the tax when you plan to buy a brand new car.

New car price and income

According to IRS site, “The amount of the deduction is phrase 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 join filers”. Other than the income, the car price has to be under $49,500 of any qualified new car, light truck, motor home or motorcycle. See 2009 new car tax credit.

New car credit period

The tax credit only applies to the new cars that purchased between the eligible dates. Between the date means you have to complete the deal in the period. In 2009, the eligibility dates for new car credit falls between February 17, 2009 and December 31, 2009. Which means your deal MUST be completed between these dates in order to get tax deduction.

Qualification for new car tax credit

If you make more than $260,000 a year as a family or buy a car costing more than $49,500 you are not qualified. If you pay in cash in terms of taking a car loan you are not qualified too. Check with your state tax department whether your state has this stimulus package because it only applies to certain state and local sales. If your state does have this privilege, choose a car below $49,500 and make your partial payment with car loan will get you the savings.

How to get it?

The tax credit only applies to any new cars in any kind of categories like passenger cars, SUVs, motor homes, pickup trucks, or luxury cars. It is estimated the new car tax break will save up to $2,000 for any new car or truck costing below $45,000.

If you have made your purchased between the eligible dates, you can make this saving happen when you file your 2009 taxes which due on April 15, 2010. Other than that, if you are planning to do a trade-in but your old car price is not high, you can consider to donate your car to charity. You are able to get some savings from tax deduction from IRS by doing this and at the same time you get your tax credit.

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