As it becomes increasingly important to manage money wisely during this economic recession, citizens should be thinking ahead towards filing their income tax returns. In considering the deductions that they may be able to claim, taxpayers should be aware that a new tax deduction is available. If a new vehicle has been purchased between February 16, 2009, and January 1, 2010, taxes designated under the categories sales and excise may be deductible.

To qualify, the filer must have a total income less than or equal to $135,000 for the year (the amount is $260,000 for a joint return). The amount eligible for deduction is adjusted for lower income levels. This deduction can be filed in one of two ways; it may increase the standard deduction, or it may be filed as an itemized deduction.

Only the amount of tax imposed on the first $49,500 of the vehicles value is considered when calculating the total deduction. The vehicles which qualify are motor homes, automobiles, motorcycles, and light trucks which have a gross vehicle weight rating equal to or less than 8,500 lbs. These vehicles qualify so long as the original use of the vehicle begins with the individual filing as purchaser. Used vehicle sales and excise taxes do not qualify for this credit.