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Discussion Starter #1
I have heard that there has been a new change to Income Tax law for this year and anyone who purchased a car last year might be able to get that deducted. Is anyone on this board familiar with that? Any CPAs that can confirm this information?

This could save money to a lot of people in this forum who just bought their FXs!!!
 

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Could be refering to the new Sales tax deduction. States that do NOT have a state Income Tax can now deduct their sales tax. Of course since tha law just recently went into effect then very few (if anyone) actually saved receipts to calculate their actual deduction.

I got the rate sheet in the mail yesterday and the standard deduction is very low. However the sales tax on the FX alone more than covers that standard deduction.
 

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You can add the FX "ON TOP" of the standard or whatever your claiming...it is in addtion big ticket items are seperate. Yahoo! My wife keeps ALL of our reciepts...
 

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OIIIIIIO said:
You can add the FX "ON TOP" of the standard or whatever your claiming...it is in addtion big ticket items are seperate. Yahoo! My wife keeps ALL of our reciepts...
I did not actually read the Form yet; we have all of our charge receipts (but not cash ones). I hope you are right that car sales tax can be added on top of the standard (although our charge receipts may exceed the standard anyway).
 

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Discussion Starter #6
Can anyone explain what this new law is? msu79gt82, you seem to have a knowledge of it. Can you please put it in terms everyone can understand? What can or cannot be deducted? What is this new law about? Please "bottom-line" us. :)
I'm sure responses will be greatly appreciated by everyone.
Thanks in advance.
 

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I noticed a new question about purchasing a vehicle in 2004 from my CAP's sheet. I didn't know it was about this topic.
 

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You cannot get the big IRS deduction, as the fx GVW is not rated high enough.
 

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krzys4 said:
Can anyone explain what this new law is? msu79gt82, you seem to have a knowledge of it.
sealman28 said:
You cannot get the big IRS deduction, as the fx GVW is not rated high enough.
We are apparently talking about two different things. There is an old law (loophole) that allowed tax deductions on some SUVs; that loophole has been closed for 2005, thus 2004 is the last year to take advantage of it. I am not that aware of this particular law as it never applied to me (I'll defer further discussion to those in the know).

I replied regarding the new law that allows Sales Tax deductions for those states that do NOT have an Income Tax. Because State Income Tax is deductible (and those states tend to have lower sales taxes), those living in states w/o an Income Tax can't benefit on their Federal returns. Hence the new law seeks to equilize the State tax benefits on our Federal returns. The law apparently applies to the 2004 tax year because I received my package in the mail yesterday. Thus it appears that sales tax I paid on my FX is going to be deductible (or at least I hope so as I have not yet read the fine print on the forms).
 

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What? :? Hope TurboTax has something on it. :wink:
 

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Discussion Starter #11
I replied regarding the new law that allows Sales Tax deductions for those states that do NOT have an Income Tax.
Hmmm... Interesting. I have heard that this will apply to Illinois and yet we do have Illinois Income Tax...
 

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krzys4 said:
I replied regarding the new law that allows Sales Tax deductions for those states that do NOT have an Income Tax.
Hmmm... Interesting. I have heard that this will apply to Illinois and yet we do have Illinois Income Tax...
When all else fails read the directions :oops: Its IRS Publication 600 http://www.irs.gov/publications/p600/ar01.html

Quote: New for 2004, you can elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction on Schedule A (Form 1040). You cannot deduct both. Generally, to figure your state and local general sales tax deduction, you can use either your actual expenses or the Optional State Sales Tax Tables contained in this publication.

So those who live in states with an Income Tax get to choose; those who live in states w/o an Income Tax must use the sales tax deduction.
 

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Discussion Starter #13
Thanks msu79gt82.
 

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Mrs. johnmax's business takes care of the FX :D . It makes a good "company vehicle".
 

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The tax loophole for GVW vehicles being totally deducted was closed as of Oct 1, 2004. If you bought a QX56 Oct 2nd, you're SOL.
 

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johnmax said:
Mrs. johnmax's business takes care of the FX :D . It makes a good "company vehicle".
Funny, that's what ours is too. 8)
 

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pauly47 said:
The tax loophole for GVW vehicles being totally deducted was closed as of Oct 1, 2004. If you bought a QX56 Oct 2nd, you're SOL.
IIRC the only thing that was "closed" was the 1st year $100K accelerated business deduction for SUVs under 14K GVW. And even that didn't go totally away, it just dropped back to the $25K it was before, and it retained the 50% bonus deduction. So anyone paying $50K or so for their SUV still can pretty much write it all off in the first year anyway.

FWIW - This is just a layman talking, get the real forms and schedules or talk with your CPA for the real scoop.
 
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