Let's say you make $100,000 this year. If you pay $5,000 in taxes on the Z, then you'll pay taxes on $95,000 of your income in 2010. It's a write-off or "deduction" not a true credit.

New Car Tax Rebate- Obama Economic Stimulus Plan: Cash Back on 2009 Vehicle Purchase, Not Tax Credit on Federal Return | Suite101.com

thanks
found this

!!!GREAT NEWS

thanks for that, best news ever since i was not expecting it. this actually makes buying a 2009 model more attractive than buying a 2010 since you may not receive this stimulus in 2011 tax returns... :)

will keep you posted!

Thanks, Matt.

It's like putting money in an IRA (almost).

Which reminds me. I really have to max mine out before I do my taxes. I forget and then I'm too lazy to amend my return.

You can add the money right up to April 15 2010

I do my taxes in Feb and never feel like amending, so I usually just spend my extra money irresponsibly on things like a 370z or something....:tup:

so basically, they take the amount of tax you pay on a "Z" (i think it's about $3,000 for base plus sports... not 100%) and deduct that from your gross income for the year and you are only taxed on the remaining...

so you are not actually getting$3,000 back, just getting taxed less.

still better than i was expecting in the first place, so it's still great!

Don't forget that you may wind up in a lower tax bracket after the deduction.

Yep, not a true credit like the new home buyers get, but still not bad! Especially when you add it up with mortgage interest, charities, etc.

I'm going to have to look hard at it this year, more than normal. Because of a substantial raise this year, it'll be the first time I'm even close to the next tax bracket. There may be a few lucky charities out there if math is on their side!

If you are now above $80k income, get ready for sticker shock, Bubba!

so after reading this article to try and understand this better... how does this push you up into another tax bracket, i thought it would push you down,

for example (based on article) lets say your total income for the year is $78,000 putting you in the 25% bracket and you get a tax deductible of $3,000 for buying a Z, wouldn't that make your total taxable income $75,000? or is it the other way round with the $3,000 increasing your total taxable income to $81,000 pushing you into the 28% bracket (don't know why it would, maybe someone can clarify)

thanks!

You are confused. The $3000 reduction would keep you in the same tax bracket, maybe even put you in a lower one. If your gross income was $81k, you would be taxed at a $78k rate after the tax credit.

that's what i thought the first time

so you meant this as a good thing then...

i guess i got confused by this, i didn't get the meaning, thought it was a bad thing

thanks for the clarification! :tiphat:

Tax brackets are applied incrementally anyway, it's not a big deal to hit the next one. It's not like all your income will be taxed at the higher level.

...just be aware that in the states that don't have state income tax, like Texas, you have always been able to deduct vehicle taxes and so under the new incentive plan (that runs out in Dec) you won't be able to do anything new. In other words, you can't deduct the taxes twice in those states.