Can you deduct anything from buying a new car in 2006?

Certain alternative fuel vehicles -- mostly hybrids -- may qualify for a tax credit. The dealer will provide you with certification of the eligibility for the credit. File Form 8910 to claim the credit. Here's a link to the form: http://www.irs.gov/pub/irs-pdf/f8910.pdf

Deductions for the use of a vehicle are limited to business use.

Deductions are not the same thing as credits. Deductions reduce your taxable income. Credits are a dollar-for-dollar reduction of your tax liability. The Alternative Motor Vehicle Credit is not a refundable credit so it cannot reduce your tax liability below $0.

You live in Illinois (as do I). If you are itemizing, you have a choice between deducting the income tax paid in 2006 or the sales tax paid. Since you certainly didn't keep ALL your receipts with sales tax for 2006, you can use the IRS tables to calculate the sales tax, then add the sales tax on the car.

If the car price was $20,000 your state sales tax is $1250. With 1 exemption, you would also be allowed an additional amount based on your income. (In the neighborhood of 1%, if your income is less than $100,000.) If you live where there is a local sales tax (RTA, county, and city or village) your sales tax deduction will be greater. Turbo Tax will give you the answer. You can also use IRS pub 600 (see below) or the IRS sales tax calculator (2nd link below).

With an income of $40,000 for example, your Illinois income tax would be less than $1200 and the above sales tax would be better.

Use your own numbers and residence, then use sales tax or income tax, whichever is greater.

Whether you live in Illinois or Arizona is irrelevant. Most states follow the federal return.

So the answer to your quesion:

If you are an employee: You can claim "depreciation" on your car, and deduct only the business portion as a Form 2106 "Employee Business Expense" deduction, which is reported as a Schedule A deduction. This deduction is only available, if you itemize.

If you dont itemize, you might be able to claim it as a Schedule C expense; but only if

you have a business on the side.

Refer to irs. gov and search out Form 2106 and Schedule C, and Form 4562, and, read the instructions.

By the way, if you purchase a 6000 lb vehicle such as a Hummer, etc., you can write it off as a Sec. 179 depreciation deduction. Read the instructions.

It depends how much you used it for work and were not reimbursed for it. You can't deduct for commutes. Also, there is some depreciation the accountant is probably deducting, but you'd have to consult with your accountant (or his!) to see what that is. Could it be your friend has a different kind of job wherein he uses his car for business?

in trouble-free terms the area of the motor vehicle registration costs that represent a tax on the fee of the motor vehicle is tax deductible as a private components tax. as an party, in California, $36 of the registration fee is the rather registration fee, collectively as something is a components tax. in trouble-free terms the valuables tax ingredient is deductible.

Only if the new car was a hybrid. Or used for business purposes.

hybrid car? and maybe sales tax