If you bought a car between February 16, 2009 and January 1, 2010 (non-inclusive), and you paid a sales tax or excise tax, you may be able to deduct it from your income taxes. This was one of the provisions of the 2009 American Recovery and Reinvestment Act. The car, light truck, or motorcycle has to weigh less than 8,500 pounds and you must have purchased it new. You cannot take the deduction if you purchased a used car or if you leased it and this deduction is not related to the Cash for Clunkers program. You can deduct the sales or excise tax up to the first $49,500 of the purchase price. If you live in a state without a sales tax, like Delaware, you can deduct other fees and taxes as long as they’re collected by the government on sales. Fees collected by the dealer are not deductible.

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After last week’s Thursday post on adjusting your tax withholding, I thought that we needed a full blown post on the best year end tax moves. So who better to turn to than prolific tax expert Kay Bell, author of The Truth About Paying Fewer Taxes? She was kind enough to list not one, not two, but nine tax moves you can make before the ball drops.

It’s time to make your year-end tax list and check it twice to ensure that you give yourself the gift of tax-savings. Here are 9 ways this month to help make your 2009 tax bill as small as possible.

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Think back to elementary school, can you remember how many times your school had a fire drill? They were never announced ahead of time, the bells just rang, everyone got up, lined up, and left the building in an orderly fashion. Everyone knew what they were supposed to do because it was scripted ahead of time. No one panicked because we always assumed it was a drill, even when it wasn’t. (which puzzles me why all of my employers pre-announced rare fire drills)

When was the last time you had a financial fire? Maybe the car broke down or you broke a window in your house. Maybe you were one of the many millions who lost your job last year. I bet, in most cases, you weren’t sure what to do afterwards.

That’s why I’m recommending that you conduct a financial fire drill.

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Toyota announced yesterday that they would recall 3.8 million cars in the United States in what is the largest ever U.S. recall. The removable floor mats can cause the accelerator to stick and push vehicles to speeds in excess of 120 miles per hour. Toyota is working with the National Highway Traffic Safety Administration for a fix.

They advise that you remove the floor mat on the driver’s side immediately.

The following vehicles are affected:

• 2007-2010 model year Toyota Camry
• 2005-2010 Toyota Avalon
• 2004-2009 Toyota Prius
• 2005-2010 Tacoma
• 2007-2010 Toyota Tundra
• 2007-2010 Lexus ES350
• 2006-2010 Lexus IS250 and IS350.

Their advice, if the car is accelerating out of control, is to step on the brake pedal with both feet, then try to put the car into neutral and switch the ignition to accessory power (where only the radio is on). Don’t turn off the power or the steering wheel will lock up. If you have a start/stop button, like in the Prius, you can hold the button down for three seconds to shut off the engine.

Toyota to recall 3.8M vehicles over floor mats [Associated Press]

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CNN Money played with the 2008 Census data released on Monday and discovered that the nationwide average commute is 25.5 minutes. If you work five days a week and fifty weeks a year, that’s 12,750 minutes spent in the car. For the math whizzes out there, that’s 212.5 hours or 8.85 days.

The average American spend over a week sitting in his or her car driving to or from work. It’s no wonder driving is more dangerous than flying, we spent over a week in the car just getting to and from work. This doesn’t count the time we spend on vacation, going out, whatever.

The longest commute belonged to citizens of East Stroudsburg, PA where many of the residents commute the 60 miles to work in NYC, spending 40.6 minutes a trip. The shortest belonged to folks of Grand Forks, ND where the average commute was a scant 14.3 minutes each way.

When I used to drive to work, mine was about 25 minutes to the home office each way. At one point I supported a client around the Washington DC area and my commute ranged anywhere from 45 minutes to several hours if the weather or traffic wasn’t cooperative. I passed the time listening to some audiobooks, sports talk radio, and/or NPR shows.

How long is your commute? And what do you use to kill the time?

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If you took advantage of the Cash for Clunkers program to buy yourself a brand new vehicle, you might be wondering about how you deal with the taxes involved in getting that $3,500 or $4,500 voucher. The IRS isn’t in the business of letting you get something for nothing!

Federal Taxes

You might be surprised to learn that there are no federal tax consequences. The IRS does not consider the voucher as income so you won’t need to pay any taxes on it. You can also take advantage of any State and Federal tax incentives for buying hybrid vehicles, the Cash for Clunkers voucher doesn’t cancel that out (something the dealer probably told you if you purchased a qualifying hybrid vehicle). For a full list of those vehicles, as well as how much of a credit you receive, visit Fueleconomy.gov’s Energy Tax Credits for Hybrids page.

State & Local Taxes

You may have to pay taxes to the state or local government on the tax voucher though. For example, in Maryland, you pay a 6% sales/excise tax on the price of a car when you register it. If you purchased a car with a voucher, you have to pay the 6% tax on the full purchase price of the vehicle including the voucher. So on a $3,500 voucher, Maryland residents pay $210. On the $4,500 voucher, Maryland residents pay $270. The voucher is not recognized as income in the state of Maryland, but you still pay taxes through sales tax.

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When you buy a car, the biggest number you see is the price. The sticker price, the invoice price, and the price you paid to get that car onto your driveway or into your garage. Savvier buyers also look at the total cost of ownership, which includes the price but also adds in the cost of driving, maintaining, and insuring the car.

The easiest way to determine the total cost of ownership on a car is to turn to online calculators, like this True Cost to Own calculator from Edmunds.

If you’re curious just from an insurance perspective, Forbes has published a list of the least and most expensive cars to insure according to data provided by Insure.com. They quoted rates for a 40-year-old male who commutes 12 miles to work with your fairly standard insurance limits. $300k/$100k injury limits, $50k property damage, and $500 deductibles on collision and comprehensive.

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When we were looking at houses a few years ago, I was paying about $600 a month in rent. I was splitting a $1189 per month, 2-bedroom apartment with a friend and my half was a little less than half. $600 a month in rent is fantastic in the Baltimore-Washington D.C. area and I was thrilled to be able to save up some cash for a house, despite housing prices soaring back then. So, when I started looking, the prospect of paying a $1500 mortgage was downright scary.

That’s when I learned the technique of “pretending” as a way of preparing yourself for major purchases. I should “pretend” I currently have that mortgage and see how it affects my financial situation.

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