| You probably thought that with “cash for | | | | Civic GX. This car runs only on compressed |
| clunkers” done and gone, there was no longer | | | | natural gas. There are other deductions for |
| any incentive from the federal government to | | | | other vehicles. To get the information on all the |
| buy a new car. In reality, however, there are still | | | | deductions and how they apply to each vehicle, |
| a number of incentives for new car purchases on | | | | visit fueleconomy.gov. Please note that the tax |
| the books. | | | | incentives for hybrid purchase are tax credits, |
| You can get tax deductions and dollar for dollar | | | | which means that they are a dollar for dollar |
| tax credits on all kinds of vehicle purchases. It is | | | | reduction of your taxes. |
| uncertain whether or not most of these tax | | | | Electric powered vehicles have the best tax |
| deductions and tax credits will be extended into | | | | incentives. You can deduct 10% of the total |
| upcoming tax years, so if you are considering | | | | purchase price of an electric car from your taxes. |
| getting a new vehicle at all, it might be best to | | | | If you are buying a new car in 2009, it might be a |
| make that purchase in 2009. | | | | good idea to donate your old one. There are |
| You can thank the American Recovery and | | | | many charities that will accept your old car as a |
| Reinvestment Act of 2009 for most all of these | | | | donation. Just get a receipt, and be sure that |
| special provisions for new car purchases in the | | | | the charity has a non-profit status so you can |
| year 2009. | | | | claim a charitable donation against the value of |
| There is a New Car Purchase Deduction available | | | | your old car. |
| for taxpayers who buy cars in 2009. Under this | | | | If you are able to work on your old car and wish |
| new deduction, you can deduct excise taxes and | | | | to convert it to an electric vehicle, the federal |
| local and state sales taxes on a new car purchase | | | | government will help you out with a 10% tax |
| of up to $49,500. | | | | credit against the purchase price of your |
| There are several deductions available to | | | | conversion kit. You can also claim this credit, |
| taxpayers who purchase hybrid or fuel alternative | | | | additionally, even if you have filed a tax credit on |
| vehicles in 2009. The biggest of these | | | | a hybrid purchase. |
| deductions is $4000 for folks who buy a Honda | | | | |