We have previously blogged about the Obama administration's proposal to cap personal deductions for high income taxpayers at 28%. According to the New York Times, this proposal did not make it into the budget. Good news for high income taxpayers and charities.
"Under current law, the interest on a car loan is not tax deductible. Senator Mikulski’s plan will change this, making interest payments on car loans and state sales/excise car tax-deductible for new cars purchased between November 12, 2008 and December 31, 2009. This deduction is “above-the-line” meaning it can be taken by both itemizing and non-itemizing tax payers. The plan is targeted so that only families making less than $250,000 a year, or individuals making less than $125,000 annually, qualify for the full deduction. Under this plan, a family would save about $1,553 on a $25,000 car, and about $2,500 on a $35,000 car. For more information on Senator Mikulski’s proposed legislation, go to: http://mikulski.senate.gov/_pdfs/Press/autoownershiptaxamendment.pdf."
You can read the Senator's press release here. I just wish her plan didn't end after 1 year and didn't phase out for higher income taxpayers...but these are just my personal opinions...
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