2. Tax deduction for buying a new car. The stimulus law also gives a tax deduction for sales tax if you buy a new car (not a used car). To qualify for the tax deductions, you must buy a new car under $49,500 between the date the law is signed and 12/31/2009. There’s also an AGI limit of $125k (single) or $250k (married filing jointly), and a phase-out range of $10k. You can take advantage of this whether you itemize your deductions or use the standard deduction.
Bought When?By Whom?Tax BreakBefore 2/17/2009anybodyNone2/17/2009 - 12/31/2009AGI under $125k/$250k (phase out to $135k/$260k); buy a new car under $49,500tax deduction for sales taxSource: CCH Tax Briefing. Full text of American Recovery and Reinvestment Act of 2009.
Patience is greatly rewarded by our government. If you bought your home or car too soon, you get no tax break or you only get a small break. If you waited, not only you get a better price, you also get a much bigger tax break. It makes you wonder if even bigger tax breaks are coming down the road. If I were in the market for a home or a new car, I would not proceed until I know I won’t miss out on a significant tax break.

• A family earning $250,000, would save about $2,500 on a vehicle costing $35,000, assuming a 48-month loan at 7-percent interest.
• A family making $150,000 a year would save about $1550 on a $25,000 vehicle assuming a 48-month loan at 8-percent interest.
• An individual earning $100,000 would save about $1,460 on a vehicle costing $23,600
• assuming a 60-month loan at 5.5-percent interest.