Tax Credit verses Tax Deduction

[Prius1]

Hello Folks,

I'm new to this forum and have just a few questions having read almost every thread in this forum (some twice). The information that I have on hand indicates that this is the last year indeed for the Tax Deduction. I have also read that as of 1/1/06 there is an approximate #3,150 Tax Credit on the prius if it is put into service on or after that date. Am I correct on this? The reason I ask is simple - I'm on that 4 month waiting list and even went so far as to add to the order sheet that I would take delivery on or after that date and had the dealership also sign it.

Thanks for you help.
Joe @ jgleasonjr@comcast.net

[Tideland Prius]

Yes you are.

[Prius1]

Thank you Tideland! I originally ordered the tideland pearl color but I understand that it is not going to be available so I swithced to the Light tan/gold color (I forget the name of that color).

Joe

[cgraham]

[QUOTE=Prius1]Hello Folks,

The information I have indicates that this is the last year indeed for the Tax Deduction. I have also read that as of 1/1/06 there is an approximate #3,150 Tax Credit on the prius if it is put into service on or after that date. Am I correct on this?

The tax credit amount appears to be uncertain:

http://moneycentral.msn.com/content/...ar/P125244.asp

I don't know the date of this article: there could be newer info. I have also seen the $3,150 figure cited. I'm assuming nearer to $2000 until I have firm IRS info. I would like to know the exact amont for the Prius.

I believe you can get a $500 deduction on a new '05 model if bought in '06 - unlikely scenario - saw it on a Fed page somewhere.

Charlie

[Prius1]

Charlie,

What I've been able to find is the actual law itself that was signed in August. Here is the link but get a beer the law is huge!

http://hybridcars.about.com/gi/dynam...onf_report.pdf

Joe

[cgraham]

Thanks, Prius1, but I think I'll have the beer but decline to read the 17xx pages; The link I provided (only about 2 pages) indicated that the formula for calculating the credit for each model is very complicated and had not been calculated out yet by the IRS: I don't know if that has been done since. Independent calculations were not considered reliable.

Charlie

[Prius1]

Hey Charlie,

I too have refused to read the 1,700 plus pages in the new energy law (I have a life and reading this thing would kill a person!) I have attempted a find several times on "tax credit" but I don't seem to find any specific hybrid tax credit info. Maybe somebody who is a federal government employee and helped write the 1,700 plus page document might be able to save all of us a ton of time and just tell us what page the specific language is on! You've gotta love the federal government!

Joe

[Tideland Prius]

np! Tideland's nice. I don't know why they've replaced it with an ugly (imo) light green called Silver Pine Mica.

The light gold one is called Driftwood Pearl.

[cgraham]

Joe:
"tell us what page the specific language is on! You've gotta love the federal government!"
>>>>>>>>>>>>>>>>>>>>
I don't think that is going to help you. This link says you can "can calculate the hybrid car tax credit yourself using the tables in the energy bill, or have your tax preparer assist you."
<have another beer >
"Some people have calculated that the Prius is the winner in all this with a hybrid car tax credit of $2750, while the Accord may only receive a $400 hybrid car tax credit. The American Council for an Energy-Efficient Economy has listed their estimates for the tax credits. They also have the Prius coming out on top, but with a tax credit of $3,150 , the Accord as $650. But ... even these numbers have been disputed ..........."


http://hybridcars.about.com/od/news/...dtaxcredit.htm


It seems as if no-one has confidence in any non-Federal calcuations - but the limited consensus looks good for the Prius.


I wonder if dealers will capitalize on these credits by pushing prices up? I expect to get a MSRP contract if we decide to go for an '06 & avoid that problem. Might Toyota raise the MSRP (not announced yet for '06)? My dealer says very unlikely because they only have 1 price raise a year and had one recently. <No icon 4 X fingers>


I hope he is right. I always want the best of both worlds!


I don't much care for Smiliekons, but this post pleaded for some.


Charlie

[Prius1]

Charlie,

That's what happens when you drink more beer than reading those Federal 1,700 plus page laws that we tax payers are paying for!

Joe

[cgraham]

The time was better spent!

Charlie

[BullMarket]

No beer needed for these. Shucks.

http://www.irs.gov/newsroom/article/...130146,00.html

http://www.irs.gov/newsroom/article/...104549,00.html

http://www.irs.gov/newsroom/article/...107766,00.html

BULLMKT

[Prius1]

Bullmkt,

Thanks for the articles but they are old news. The new law was signed on 8/6/2005 and goes into effect on 1/1/2006. So what you posted applies to all vehicles prior to 1/1/2006.

Joe

[tihead]

I asked my tax accountant about the tax credit. He confirmed alot of what has already been said here. However, he did raise a red flag. He said that for people who fall into AMT that the tax deduction could possibly get wiped out. In other words you may not get the tax credit if you pay amt taxes. In CA this will affect a large number of people as more are falling under AMT taxes. Does anybody know anything more about this?