Quote:
Originally Posted by dudafunk
^^^ I'm sorry, yes I made a typo. Meant to say deduct cost of tax paid ON the car. And that in the end this saving is negligible for an say an average buyer who say makes 50-70k a year.
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The formula is quite simple assuming you don't drop to a lower bracket from your deductions: (Federal Tax Bracket) * (Sales Tax Paid)
@60k/year you're in the 25% tax bracket
If you paid 2,000 on sales taxes on the car then you get back $500. That's almost 2 Playstation 3s!
Quote:
Originally Posted by dudafunk
I guess basically you just subtract the car cost from your taxable income for both federal and state tax forms - and THEN carry on with the usual calculation (apply std deductions etc. etc.)... but anyway, I confirmed, its not going to result in a $900+ saving by any means as someone above pointed out.
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It was $900+ for that particular person since he is in the 30% bracket and he paid almost 10% in sales taxes.