Here are the details: The sales tax for any new car, truck, motor home or motorcycle purchased between Feb. 16, 2009, and Jan. 1, 2010, can be deducted on your 2009 taxes. This deduction is available for individuals with an adjusted gross income of less than $125,000, or for joint filers under $250,000. The deduction phases out for taxpayers whose AGIs fall between $125,000 and $135,000 for individuals and between $250,000 and $260,000 for joint filers.
The deduction is only good for the taxes paid on a vehicle up to $49,500 of the purchase price. So if you buy a $70,000 car, you won’t be able to deduct the taxes for the additional $20,500.
Two important points to emphasize: First, even if you haven’t filed for 2008 yet, the deduction can only be used on your ’09 taxes. Second, the law is retroactive, so if you purchased a car after Feb. 16, this is a bit of good luck for you.