Triumphrat

dazco · 09-24-2009, 05:11 PM

I just found this, and as far as i can tell those of us with Tbirds in the USA, or any other new car, bike, motor home or light truck bought between feb 17 2009 and the end of the year are eligable for the deduction of the taxes paid on it ! Not sure yet just how it works, and i want you guys to read it too and see if i'm missing something. But i believe we can get all the taxes paid for our vehicles purchased after feb 17 back as a deduction. Up to $50k that is...so taxes on a $80k vehicle, you get the taxes back on $50k only...still a lot. There are restrictions on those with extremely high incomes so i doubt it will affect many here. Those who it does affect, please adopt me.

Anyways, read up and see if it's as good as i'm saying. if this is true, big bore here i come !!!

http://www.irs.gov/newsroom/article/...204519,00.html (B sure to click the link to the Q & A page too)

engage · 09-25-2009, 09:44 AM

Looks like you have it right, but it also looks like a deduction, not a credit, so it would be hard to reach a level of $1,000 in savings. So if you paid $1,000 in taxes, which is unlikely in most states (Daz - you have the pleasure of paying CA sales tax

) you'll save whatever your taxes would have been on your last $1,000.

braindead0 · 09-25-2009, 10:00 AM

Quote:

Originally Posted by engage

Looks like you have it right, but it also looks like a deduction, not a credit, so it would be hard to reach a level of $1,000 in savings. So if you paid $1,000 in taxes, which is unlikely in most states (Daz - you have the pleasure of paying CA sales tax

) you'll save whatever your taxes would have been on your last $1,000.

I'd guess you have to itemize as well... It't certainly good information though.. penny saved and all.

Thatch · 09-25-2009, 10:01 AM

Beings a self employed consultant I've got plenty of room for as many deductions as possible. I tried selling this particular point to the wife as a good reason but buy another... yeah, I didn't get far with that.

dazco · 09-25-2009, 10:52 AM

No, the beauty is you DON'T have to itemize ! There is simply going to be a section in the tax forms that asks if you bought a new vehicle. You fill in the info and wham, instant deduction even with a 1040 form.
Engage, i'm not sure what you mean? As far as i can see, i should get back the full $1100 i paid in sales tax. I think what you must be saying is it deducts it from state income taxes, but that can't be because this is an IRS document. I usually get back about $1k at the end of the years and pay out a few thousand in state and federal taxes. Please enlighten me.

braindead0 · 09-25-2009, 12:11 PM

Quote:

Originally Posted by dazco

No, the beauty is you DON'T have to itemize ! There is simply going to be a section in the tax forms that asks if you bought a new vehicle. You fill in the info and wham, instant deduction even with a 1040 form.
Engage, i'm not sure what you mean? As far as i can see, i should get back the full $1100 i paid in sales tax. I think what you must be saying is it deducts it from state income taxes, but that can't be because this is an IRS document. I usually get back about $1k at the end of the years and pay out a few thousand in state and federal taxes. Please enlighten me.

Holy deduction misconceptions batman!

A deduction reduces your taxable income. So if you make 50,000 you deduct $1000 of taxes paid for a new momo making your taxable income 49,000.

Say you pay 20% tax, without the deduction your tax liability would be 10,000. After the tax deduction your tax liability is 9,800. So your $1000 deduction saved you $200 in this highly simplfied case (or simply 20%).

A tax credit is a direct reduction in tax liability, this isn't that.

engage · 09-25-2009, 12:18 PM

Quote:

Originally Posted by braindead0

Holy deduction misconceptions batman!

A deduction reduces your taxable income. So if you make 50,000 you deduct $1000 of taxes paid for a new momo making your taxable income 49,000.

Say you pay 20% tax, without the deduction your tax liability would be 10,000. After the tax deduction your tax liability is 9,800. So your $1000 deduction saved you $200 in this highly simplfied case (or simply 20%).

A tax credit is a direct reduction in tax liability, this isn't that.

Yup, that's it and the document stated that it was a deduction, not a credit.

braindead0 · 09-25-2009, 12:30 PM

Quote:

Originally Posted by engage

Yup, that's it and the document stated that it was a deduction, not a credit.

Handy that you don't have to itemize though... I didn't buy a McMansion.. so I haven't had enough deductions for years ;-)

dazco · 09-25-2009, 02:06 PM

Ok, granted this is all over my head, as i know nothing about how taxes work and always file a simple 1040. But i thought it was like this.....say your taxes paid are $3000 if you have no deductions. If you then had a $300 dedution for say gasoline used on your job, you would pay $300 less, so your taxes paid would then be $700. This is not correct? Sorry, i cannot wrap my brain around this kind of thing.

dazco · 09-26-2009, 12:35 AM

Ok, i think i get it. The $1100 I paid in taxes is taken off my adjusted gross income. So if i made 50k and paid $1000 tax on the bike, i would now have to pay taxes on $49k instead of $50k. So i figure i'll probably save about $20. A slight letdown to say the least. Aww F@#%.