2009 Motorcycle Sales Tax Deduction Ends Soon

Photo courtesy BMW Motorrad.orrad.

Sales Tax Deduction for New Motorcycle Purchases Ends Soon

Remember that the U.S. Internal Revenue Service says that purchasing a new car, light truck, motor home or motorcycle could qualify you for a special deduction for the state and local sales and excise taxes on your 2009 tax returns.

Purchases made before Jan. 1, 2010, will qualify for this deduction under the American Recovery & Reinvestment Act of 2009 (ARRA).

The deduction is limited to the sales and excise taxes and similar fees paid on up to $49,500 of the purchase price of a new vehicle. 

The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000.  Taxpayers with higher incomes do not qualify.

Taxpayers who make qualifying new vehicle purchases this year can estimate the deduction with the help of Worksheet 10 in IRS Publication 919, "How Do I Adjust My Withholding?"

Lines 10a to 10k of the worksheet show how to take into account purchases above the $49,500 limit, as well as the reduced deductions for taxpayers at higher income levels.

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.

For answers to questions about the deduction for sales tax and other fees, these questions and answers might help.

A video on the YouTube channel of the IRS and audio podcasts in English and Spanish are available to help taxpayers take advantage of the deduction.

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