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Will someone who has the TAX background or Legislative Insight..........PLEASE, PLEASE, Please, please............ Give out the In's and Out's of the NEW Tax Break as of Jan 1, 2006!!!!!!!!

I have heard soooooooooooooooooooo................many different Interpertations of it .........no wonder a bill never get passed in the Government!!!!

I have heard..........ONLY 60,000 units...........World wide, then 60,000 in the USA, NO now it 60,000 units State wide ..........and believe it or not ...............60,000 per DEALERSHIP!!!!!

Then I have heard.....60,000 units and then all the other sold in that Fiscal Quarter................

Then I have hear that the Prius will recieve anything from $300.00 to $5,761.00..........And this is dependent on Gas mileage difference Between a conventional Engine( Prius doesn't have a Conventional Match) and The Hybrid System.............. Then I have heard that it depends on your Personal (Verifiable) Milage useage difference................ then I heard EPA is going to put out a List of who get what tax Relief..............

And then finially I have run across the ....is it a TAX Break .....No it's a TAX DEDUCTION !!!!!

I hope ther is a site or a CPA or TAX Lawyer in our midst that can clear this up once and for all!!!!

Thanks for the Help.................

Tom Q.
 

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Discussion Starter #2
Well it's a beginning...........

Here's a Excerp from the ACEEE (American Council for an Energy Efficient Economy................ Thanks to Jeff B.= 2005 Prius, Black w/ Package #6.

Thanks Jeff:

Light-Duty Hybrid and Diesel Vehicle Tax Credits in the Energy Bill
A prominent provision of the recently-passed energy bill creates new tax credits for consumers who purchase various advanced technology vehicles, including hybrid-electric and diesel-powered cars and light trucks. The provision, which becomes effective in January 2006, differs from previous federal incentives for these vehicles in relying on tax credits rather than deductions, thereby providing consumers the full dollar value of the credit.

ACEEE's estimates of the credits that would be awarded to vehicles on the market today or coming soon are shown in the table below. These estimates are based on best-available information, which may include 2005 model year data, manufacturer press statements, or specifications of similar models. Manufacturers are likely to alter vehicles in the coming years to maximize the credits they earn. [continue below...]




(Note: click on table for printer-friendly version)

Credits are available only for a limited number of vehicles per automaker. While the credits last through 2010, some automakers will exhaust their shares well before then. The provision is structured so vehicles can earn credits both for achieving greater fuel economy and for saving fuel. Fuel economy improvement is measured against a weight-dependent, model year 2002 baseline, with tiered credits starting at 25% over the baseline fuel economy. With each 25% improvement over the baseline fuel economy up to a maximum of 250%, the tax credit increases by $400.

A "conservation credit", designed to boost the amount of credit available for vehicles in the heavier weight classes, is available as well. A vehicle qualifies for the credit if it is expected to save at least 1,200 gallons over its lifetime relative to a vehicle achieving the baseline fuel economy for that weight class. For each additional 600 gallons of gasoline savings up to a maximum of 3,000 gallons, the vehicle earns $250 in tax credits.

Combining the two components, the maximum available credit is $3,400. However, once a manufacturer sells 60,000 qualifying vehicles, the tax credit is phased out over a period of fifteen months for vehicles that manufacturer produces.

Both diesels and hybrids must meet certain emissions certification levels to qualify: smaller vehicles must have a Federal emissions rating of Tier 2 bin 5 or better, and larger ones must achieve Tier 2 bin 8, a less stringent requirement. While many hybrid vehicles already meet the emissions requirement, no diesels are currently rated cleaner than bin 10. Diesels, however, may begin achieving requisite levels in model year 2007 with the introduction of ultra-low sulfur diesel fuel.

Checkout.............

http://www.aceee.org/transportation/hyb ... .htm#table

For the ESTIMATED Tax Break...........

Thanks again Jeff B.

Tom Quinn :wink:
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As for deduction versus credit, here it goes.

Up until the latest energy bill passed, which the tax break takes effect Jan 1, 2006, you received a deduction on your taxable income. It was suppposed to be phasing out in the last 2 years, but a bill exended the full $2000 deduction for the 2004 and 2005 tax years. It was supposed to drop to $500 in the 2006 tax year if the latest energy bill hadn't changed that.
A deduction reduces the income you are taxed on. So, if you are in a 20% bracket, a 2000 deduction yields $400 off what you owe in taxes.

Now a tax credit reduces the tax, not the income that is taxed.
So if you made $50,000 and were taxed at 20%, then you would have paid somewhere around $8K or $9K in taxes. But, with the tax credit, that same $8000 tax you are paying gets reduced to $5000. So effectively, you get a rebate on your tax.

This assumes though that Alternative Minimum Tax (AMT) doesn't kick in, because your tax liability became so low. The AMT was intended to make sure the rich pay some tax.
 

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tax write-off

the real question is, is there any way to file the taxes for 2005 or delay/redo filing so that one could claim the tax credit put in place as of Jan 1. 2006 for a car purchased in august 2005?

there's got to be some loophole, maybe it involves owning an off-shore oil derrick or registering as a republican or something???
 

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Re: tax write-off

shaun944 said:
the real question is, is there any way to file the taxes for 2005 or delay/redo filing so that one could claim the tax credit put in place as of Jan 1. 2006 for a car purchased in august 2005?

there's got to be some loophole, maybe it involves owning an off-shore oil derrick or registering as a republican or something???
I'm a republican, no loophole there.
In case you were't joking on the first part, the credit applies to the purchase being after 1/12006, not the filing year. Otherwise, we could indeed amend our tax filing.

So, if you forgot to get your tax deduction for your 2004 purchase, you can still get it.

Anyone have a time machine?
 
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