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Buying & Leasing a Car

New Car Sales-Tax Deduction

Potential car buyers have till the end of the year to grab this above-the-line deduction.

The stimulus lets you write off state and local sales taxes and excise taxes on vehicles, including new cars, light trucks, motor homes and motorcycles bought from February 17 through the end of 2009. You can claim the deduction on your 2009 tax return (which you file next year), regardless of whether you itemize your deductions or claim the standard deduction, which is what most taxpayers choose to do.

If you itemize deductions and normally deduct your state income taxes, you can also claim the new sales-tax deduction for a new car. But if you itemize and choose the option of deducting your state sales taxes (perhaps because you live in a state that doesn't have an income tax), you cannot claim the new above-the-line sales-tax break.

See More From the Stimulus Guide


The New Stimulus Tax Credit

This tax break puts up to $400 in your pocket.



Better Benefits for the Unemployed

Qualified filers get an extra $25 a week.

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New Homebuyer Credit

Take up to 10% off your purchase price.



Health-Care Subsidy for the Unemployed

Now there's extra help for paying COBRA coverage.



AMT Tax Relief

Taxpayers get a one-year fix on the alternative minimum tax.



College Aid Gets Fresh Funding

Rather than introduce big new ideas, this bill mostly replenishes underfunded programs and increases amounts available to families.