A few months ago, as part of the economic stimulus package, the IRS announced tax breaks for car buyers. This measures allows state and local sales tax to be deductible from federal income tax. However, that only included states with sales tax. Now the IRS has amended the provision to include breaks for those states without sales tax. They include Alaska, Delaware, Hawaii, Montana, New Hampshire, and Oregon. Car buyers from these states can now qualify for a special deduction of other fees or taxes imposed by the state or local government.

To qualify for the deduction, a vehicle must be purchased between Feb. 16, 2009 and Jan. 1, 2010 and has a purchase price limit of $49,500. Buyers must have a modified adjusted gross income of less than $135,000 if filing individually or $260,000 if filing jointly. But the deduction is phased out for individual filers with income between $125,000 and $135,000, and for joint filers with incomes between $250,000 and $260,000. Taxpayers can only claim this special deduction on their 2009 returns.

For more information on the tax breaks and economic stimulus package, see the IRS Web site.

For tips and advice on buying a new car, see our buying guide. For help in choosing the best vehicle for your needs, the interactive New Car Selector can help you quickly sort and filter models down to the attributes that matter most to you.

—Liza Barth