[cloakedknight]

I'm just curious how many of you who bought a Prius this year were fully informed by the dealer about the federal income tax tax deduction of up to $2000 that you may be eligible for? The amount of the deduction may vary depending on where you live and the price of the hybrid

If you don't know anything about this, talk to your tax adjuster and refer to Chapter 12 of publication 535 distributed by the IRS, which states the requirements to file on the 1040 form. Even though the Internal Revenue Service has announced the clean-vehicle tax credit, which covers gasoline/electric vehicles, car dealers and customers are not always well informed about deductions.

 

[BIF]

Hiya, Knight:

To the best of my knowledge, it's not $2,000. It's only $1,500 for tax year 2004. Depending on your tax bracket, it will result in a tax decrease of $200 to $400, with most people saving about $300 on their 2004 taxes.

And for the 2003 taxes, there's a blurb in the 1040 booklet saying that Honda and Toyota hybrid owners are not eligible for EV tax cuts...because our cars are hybrids, not electric vehicles.

But maybe I'm wrong, and there's a break I don't know about?

 

[mrv]

http://www.toyota.com/vehicles/2004/prius/tax.html

You're looking for the US Federal Clean-Fuel Vehicle tax DEDUCTION. You cannot claim the EV tax credit (although if you purchased in 2000 before the wording changed you might've been able to claim it then...) Ignore the title of IRS publication 535 ("Business Expenses"), as individuals can take the deduction...

For tax years prior to 2004, the deduction was $2000. For hybrids purchased in 2004, it's $1500, going down each calendar year by $500. The amount you get is based on your tax bracket. Some charts are here: http://www.usatoday.com/money/perfi/col ... 3-ym_x.htm

Some states let you claim the US Federal deduction on your state income taxes. Some other states (like OR, CO, NY, ME, MD) offer either a tax CREDIT on your state income taxes, or off of your sales tax.

More links here:
http://autos.groups.yahoo.com/group/toy ... 0963256550

(Some Canadian provinces have tax rebate programs, and in the UK you're eligible for a Powershift grant (cheque sent to you) of 1000 pound sterling (might've gone down to ~700 now).)

 

[richard schumacher]

For tax years prior to 2004, the deduction was $2000. For hybrids purchased in 2004, it's $1500, going down each calendar year by $500. The amount you get is based on your tax bracket. Some charts are here: http://www.usatoday.com/money/perfi/col ... 3-ym_x.htm

More explicitly, note two things:
1. Only the original purchaser can claim the US federal tax deduction.
2. the US federal tax deduction amount is determined by the year in which the original purchaser took delivery. For example, I ordered my 2004 in October 2003 and took delivery in April 2004; thus I can claim a $1500 deduction on my 2004 taxes.

 

[johnson487682]

Also, the deduction could go back up to $2000 if Congress renews it. When passed, the original legislation called for the amount of the deduction to decrease by $500 every year until it expired. When I bought my 2002 (in April of 2002), I was told I would be able to claim only a $1500 deduction on my 2002 taxes. However, the legislation was renewed before the end of calendar year 2002, so I was able to claim the full $2000.

If you've bought (or plan to buy) a hybrid this year, write to your Congressional representatives and ask them to support hybrids by renewing the full deduction. Because of the current high gas prices, and because this is an election year, this should be a hot topic!

Douglas (2002 Silver, Wisconsin)