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Discussion Starter #1
Hello,

Just picked up my new Prius w/package 4 on Tuesday. I'm very pleased - have about 180 miles so far (commute 70 mi a day) and I'm showing 48.5 mpg on the screen. Wow!
One question I do have concerns a $2000 Federal tax deduction for 2005 on a new Prius - I read this on the Toyota site (and I think I've read it on one of the forums too). When I mentioned it to the salesman, he said they were told it was $2000 deduction for 2001 and 2002 and it's being lowered every year and it's about $500 this year. He didn't seem really sure though.
The info on the Toyota site looks legitimate - I think I read somewhere else that 2005 is the last year for this, and it's being lowered for subsequest years.
Anyone have any definite info?
BTW, thanks everyone for the advice leading up to my purchase. I only had to wait around 3 weeks or so - I guess I went in at the right time.
Regards,
Kevin
 

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Your sales weenie is a moron. You should KNOW better than to trust anything he said!

Go here for recent discussion.
 

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Discussion Starter #3
Hi,

Thanks for the reply and a link to this post. Makes me feel better!
Actually, my salesman was a pretty good guy - can't complain about him - he just didn't seem up to date on taxes.
I'm surprised though that a Toyota dealer wouldn't 'promote' this, as it's certainly an advantage for them to know.
Regards,
Kevin
 

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My salesman said I was supposed to get a 1500 Credit, every year.

I challenged him to show me ANY proof, even an unsubstantiated website. All he could come up with was an outdated article.

I knew that at the time (August) it was dropped to $1500 for a ONE TIME DEDUCTION, not a credit, and not continuous.
 

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Discussion Starter #5
Hmmm...

Are you saying that there's only a $1500 deduction for 2005, for cars purchased in 2005? When I go to the Toyota site, it clearly says the deduction available for 2004/2005 is $2000.

Regards,
Kevin
 

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actually, the Clean Fuel Vehicle deduction keeps getting moved out in differing legislation...

originally, it was $2000 in 2000 and 2001, dropping by $500 each year until phaseout in 2005. (so, $1500 in 2002, $1000 in 2003, $500 in 2004, and $0 in 2005.)

you can view the "important changes" section of the IRS Publication 535 "Business Expenses" for 2002 to see that new legislation was passed, changing the phaseout period for the Clean Fueled Vehicle deduction... The phaseout was supposed to start in 2004, with no deduction available for vehcles placed into service after 2006. (so, 2000, 2001, 2002, 2003 = $2000, 2004 = $1500, 2005 = $1000, 2006 = $500, 2007 = $0.)
http://www.irs.gov/pub/irs-02/p535.pdf

In October of 2004, Congress passed the "Working Families Tax Relief Act of 2004," which extended the $2000 deduction out through 2004 and 2005, but made no change to the $500 amount for 2006 or the sunset ($0) in 2007.
http://www.irs.gov/newsroom/article/0,, ... 46,00.html
http://www.irs.gov/newsroom/article/0,, ... 49,00.html
You can also view it in the "What's New" section at the start of chapter 12 of the 2004 IRS Publication 535: http://www.irs.gov/pub/irs-pdf/p535.pdf

so, the original poster's dealer just has some outdated information...

For information on how to file:
http://www.toyota.com/vehicles/2005/prius/tax.html
(or consult the appropriate year IRS Publication 535 "Business Expenses" chapter 12, for information for individual filers or different forms of businesses/corporations...)
 

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Check your state's tax authority, as well. Lots of states have credits/deductions.

Oregon, for example, has a $1500 tax credit for purchasing a hybrid. That means that $1500 is applied to your 'tax paid' number, NOT reduced from your 'taxable income'. This means that if you ended up owing $22 before applying the credit (like me,) you'd end up getting a $1478 refund. (Actually, for some reason, my refund became $1527.... Who knows how TurboTax does it's calculations...)
 

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Well, TurboTax State should allow you to print the standard form all filled out. Then you can see if they adjusted your adjusted federal gross for the $2000 you took off.
 
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