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Changes to Standard Deduction

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Don't miss this new change!

You can now take some itemized deductions without itemizing your deductions! This should be a tax savings for everyone.

How does this work?

• There is a new Schedule L where you can list these deductions, which will be added to your standard deduction for the tax savings. Standard deduction for 2009 is $11,400 for marrieds and $5,700.00 for singles.
• Last year (2008) and this year (2009) you can take up to $500.00 ($1,000.00 for marrieds) of real estate tax.
• Sales tax on new car purchases (called titling tax in Virginia).
  • The vehicle must be bought after 02/16/09 and before 2010 to get the tax break.
  • A qualified vehicle is a new passenger automobile, light truck, or motorcycle with a gross vehicle weight rating of not more than 8,500 pounds, or a new motor home. If the vehicle's purchase price exceeds $49,500.00, the deduction is limited to the tax on $49,500.00.
  • The tax deduction is phased out for taxpayers with modified adjusted gross income between $125,000 and $135,000 ($250000 and $260,000 for marrieds)
  • The tax deduction limitation is per vehicle, so that a taxpayer who purchases more than one qualifying vehicle can deduct the tax paid on each vehicle's separate price of up to $49,500.00. The deduction phases out between $125,000 and $135,000 of adjusted gross income ($250,000 and $260,000 for marrieds).
  • NOTE: Businesses get a tax break and can take the sales tax on new vehicles as a deduction rather than depreciating it as basis of the asset.