Shopping for a New Car? Jackson Hewitt Tax Service Reminds Consumers About Tax Benefits for Buying or Leasing

Tax Benefits Include Energy Credits, Deductions and More

PARSIPPANY, NJ - October 3, 2007: Stylish designs, high performance engines and a host of optional creature comforts are among the countless factors - along with sticker price and financing terms - that car shoppers will evaluate as 2008 models begin appearing on showroom floors. But there's another important consideration, according to Jackson Hewitt Tax Service(R) , the tax benefits available to consumers who purchase or lease a car by the end of 2007.

"Consumers should absolutely factor-in tax considerations as they shop for a new car," urges Mark Steber, Vice President of Tax Resources, Jackson Hewitt Tax Service Inc. "Taking advantage of tax credits and deductions can directly affect decisions about the type of car as well as choices regarding financing and trade-ins. When it's time for taxpayers to meet with a preparer and file their 2007 income tax returns, these decisions may affect their refund amount or taxes owed."

If you're in the market for a new vehicle, Jackson Hewitt offers these tax tips:

  -- Consider Going 'Green':  Thanks to the Energy Policy Act of 2005, those
     who buy hybrids or other alternative fuel vehicles may be eligible for
     a tax savings up to $12,000 for qualifying vehicles if purchased by
     December 31, 2007.  However, Jackson Hewitt points out that the IRS has
     set credit amounts specific to vehicle type and that some of these
     credits phase-out based on quarterly sales.  For up-to-date
     information, consumers can check with a local Jackson Hewitt tax
     professional.
  -- Act now to take advantage of expiring sales tax deductions:  Currently
     a provision exists that allows taxpayers who itemize to deduct either
     state and local income taxes or state and local sales taxes, but after
     2007, the sales tax option will expire.  Many taxpayers had taken
     advantage of the sales tax alternative when they have larger purchases,
     such as a car or boat. To claim actual sales taxes, taxpayers can refer
     to receipts saved during the year or to the state sales-tax tables in
     IRS Publication 600.
  -- Know what's deductible:  When buying a car, consumers often evaluate
     multiple payment options.  Be aware that only some types of interest
     are deductible.  For example, the interest charged on a typical car
     loan is typically not deductible because it's considered personal
     interest.  However, if you use a home equity line of credit to finance
     a vehicle purchase, this interest may be deductible.
  -- Evaluate Whether to Donate a Car to Charity:  Before accepting a trade-
     in offer on those old wheels, consider donating your car to a qualified
     charity. "Make sure to review the special rules that apply to vehicle
     donations," cautions Steber.  "In general, the amount you deduct for
     this type of contribution depends upon what the charity does with your
     car.  If they sell it, you cannot claim more than the gross proceeds
     they received on your tax return."  Taxpayers can deduct contributions
     to a charity only if they itemize deductions on Schedule A of Form
     1040.
  -- Watch out for the Alternative Minimum Tax:  The Alternative Minimum Tax
     (AMT) is a baseline tax determined without regard to exemptions,
     deductions and certain tax preferences.  The AMT was originally
     developed to ensure that high income taxpayers paid their fair share of
     taxes, but because annual inflation has outpaced the AMT baseline
     increases, this tax is now catching more and more Americans each year.
     If you are claiming tax benefits related to your car - such as the
     credits available for buying a hybrid - these benefits may be limited
     due to the AMT.

More information on car-related tax is available to consumers at www.jacksonhewitt.com. To speak with a local tax preparer or find the Jackson Hewitt office nearest to you, call 1-800-234-1040.

About Jackson Hewitt Tax Service Inc.

Jackson Hewitt Tax Service Inc. , with over 6,500 franchised and company-owned offices throughout the United States during the 2007 tax season, is an industry leader providing full service individual federal and state income tax preparation. Most offices are independently owned and operated. The Company is based in Parsippany, New Jersey. More information may be obtained at www.jacksonhewitt.com. To locate the Jackson Hewitt Tax Service office nearest to you, call 1-800-234-1040.