Tax Moves that Save Big Bucks

Now's the time to cash in on breaks for 2009.

Sometimes you have to spend money to make money. This year, you may want to spend money to save money. By shelling out now for select big-ticket items—such as a new car, energy-efficient home improvements or your first home—you can cash in on some juicy tax breaks that will slash your 2009 income taxes.

For example, even if you missed out on the 'cash for clunkers' government rebate earlier this year, you can still save big by deducting the state and local taxes on a new car, light truck, motor home or motorcycle purchased between February 17 and December 31, 2009. That's what Steve and Karen Crosby did—twice. Now the Hamburg, N.J., couple have two new cars and can claim nearly $3,600 in sales-tax deductions. In their 25% federal tax bracket, that will save them about $900.

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Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance