[GeorgiaG]

My tax preparer just told me that according to her paperwork, the 2004 Prius I bought last August doesn't qualify for the $1500.00 tax credit. She said I was only eligble for some kind of credit based on the car's weight.

I went to the IRS website, and read that the 2004 Prius DOES qualify for the tax credit.

Anyone else have any experience with this?

thanks

Georgia Leaver

 

[hyperion]

You qualify for a $2,000 dollar exemption if you bought the car new, on your federal tax. It's even got a spot for it on the standard form, line #5. Actually you take a $2,000 deduction off your gross income. Saved me $260.00 this year. I had the same deduction for my State return here in Massachusetts. States differ but most give you some type of credit. Have your accountant make a couple of calls as this should become fairly common.

 

[RJMusser]

I put $2000 on line 35 of form 1040 and subtracted that amount to reduce my adjusted gross income.

You might want to shop around for another tax adviser. : )

Roger

 

[mrv]

You only qualify for a tax credit if your state has a credit available (OR, CO, and I think WV and KS. NY and ME have sales tax credits.)

If you purchased your Prius new, and not pre-owned or a lease, then you qualify for the US Federal Clean Fueled Vehicle income tax DEDUCTION (adjustment to gross income). Have your tax preparer look at IRS Publication 535 "Business Expenses," chapter 12. The amount of the deduction used to be $1500, but congress upped it back to $2000 for the 2004 and 2005 tax years thanks to the "Working Families Tax Relief Act of 2004" signed in Oct. 2004.
http://www.irs.gov/newsroom/article/0,, ... 46,00.html
http://www.irs.gov/newsroom/article/0,, ... 49,00.html

http://www.toyota.com/vehicles/2005/prius/tax.html
http://www.irs.gov/publications/p535/ch12.html or http://www.irs.gov/pub/irs-pdf/p535.pdf

 

[bshef]

If I buy before 4-15-05.........can I apply this to my '04 return?

 

[mgaelli]

If I buy before 4-15-05.........can I apply this to my '04 return?

No, if you buy in '05, you take the deduction on your '05 return.

 

[hyperion]

Still $2,000 until the 31st of December when it drops to I believe $1500.

 

[mrv]

US Federal Clean Fueled Vehicle income tax deduction is $2000 for tax/calendar years 2000 through 2005. 2006 is still the old amount of $500, and the sunset is 2007 (no deduction). That's assuming that no new tax legislation passes by next year, anyways...

 

[DanMan32]

You only qualify for a tax credit if your state has a credit available (OR, CO, and I think WV and KS. NY and ME have sales tax credits.)

If you purchased your Prius new, and not pre-owned or a lease, then you qualify for the US Federal Clean Fueled Vehicle income tax DEDUCTION (adjustment to gross income). Have your tax preparer look at IRS Publication 535 "Business Expenses," chapter 12. The amount of the deduction used to be $1500, but congress upped it back to $2000 for the 2004 and 2005 tax years thanks to the "Working Families Tax Relief Act of 2004" signed in Oct. 2004.
http://www.irs.gov/newsroom/article/0,, ... 46,00.html
http://www.irs.gov/newsroom/article/0,, ... 49,00.html

http://www.toyota.com/vehicles/2005/prius/tax.html
http://www.irs.gov/publications/p535/ch12.html or http://www.irs.gov/pub/irs-pdf/p535.pdf

It is not under the heading of business expenses. The SUV credit is there. The non-electric, clean fuel deduction is an adjustment to gross income, the same way the IRA deduction is done. You don't need a business to take it, or file an itemized deduction.

 

[mrv]

The title for IRS Publication 535 is "Business Expenses," but if you read the Clean Fueled Vehicle Deduction in chapter 12 it clearly states that you do not need to be a business to take the deduction. The IRS just decided for whatever reason to stick the info for the deduction in the "Business Expenses" publication 535.

 

[LowCO2]

$2K federal deduction a nice surprise

When I bought my Prius last summer, I was told the federal tax deduction for 2004 would be $1500. Checked http://www.irs.gov last week to download some forms and found out that the deduction has been raised to $2000. Sweet!

Somehow I missed this thread until now, so I'm glad the IRS is providing the information, too.

 

[CaPriusLover]

I put $2000 on line 35 of form 1040 and subtracted that amount to reduce my adjusted gross income.

You might want to shop around for another tax adviser. : )

Roger

That's what my tax person did. She actually called the support number for her tax software, and they told her. All I needed was proof that I was the orriginal owner (my tax person will not fudge a tax return and requires proof for everything).

 

[CaPriusLover]

duplicate post...

 

[hyperion]

If you bring in the documents MRV has posted several times it is cut and dried! There are no more questions or doubts.

 

[Huemmler]

Tax Credit Details

While not a tax expert, I think I understand the Federal $2000 "tax deduction". First it is not a $2000 tax deduction but rather a reduction of $2000 in your adjusted gross income. Your tax reduction will range from $200 for poor folks to $700 for rich folks. Where in this range will also depend on whether you file as a Single, or Married Filing Jointly, etc. You file for this by entering Clean-Fuel...$2000 on line 35 of Form 1040, and subtracting the $2000 from the income above to obtain the adjusted gross income for line 36 This seems to be a goofy place to enter this, as line 35 says "Add lines...". However, on page 31 of the 1040 instructions, this is what it says to do. Also Quicken TurboTax asks if you bought such a vehicle and if so, enters it on line 35. Your actual tax will come from line 42 - Taxable Income. You can obtain the tax reduction percentage from this amount, from page 76 of the 1040 instructions. Hope this helps. If anyone sees anything incorrect here, please reply.