US Tax Rules on New Car Purchases

[Bruce Nunnally]

"What kind of tax break can I get on that?" may not be the first thing you ask about the hot-pink hybrid that catches your eye at the auto dealership. But it is worth asking.

While going green doesn't add up to all the green it once did, there are still tax incentives available — including some that are slated to phase out by summer.

And if you are doing your tax return for 2009, don't forget about sales-tax credits for new car purchases during the year. If you bought two cars, you can get two credits, said Mark Luscombe, CCH principal tax analyst.

If you bought last year or have been walking around the dealership thinking it's now time for a new set of wheels, it's good to know some rules:

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