would anyone happen to know of a list of all the tax writeoffs that are possible when purchasing a hybrid? It was mentioned to me that there is a new writeoff that will be implemented january 1st which will be quite signifigant. Does anyone know of the name of this writeoff?

I posted this under the Tax Credit, but you probably missed it because it was buried at the bottom.


Depreciation limits relief. The approximate tripling of annually adjusted dollar limits on depreciation applies to electric automobiles placed in service before Jan. 1, 2007. Thus, for example, if you buy a new electric automobile for use in your business and place it in service in 2005, your depreciation for 2005 can be as much as $8,880 (compared to the $2,960 cap for a regular passenger automobile). The depreciation limit for an electric auto in the second year (2006) is $14,200 (vs. $4,700 for a regular vehicle). In order to qualify for these approximately tripled limits, the electric vehicle must be produced by an original equipment manufacturer (i.e., rather than converted to electric power after manufacture.)

Does this mean full electric? or would hybrids count?

I am actually in highschool and have never had to pay real taxes before so I am not quite sure how it all really works. But this is what i understand due to depreciation of a liability you can writeoff the depreciation of a vehicle this estimated depreciation is then used as a discount toward your total fed income tax. Is this accurate?

So if one were paying 100000 in income tax and had a hybrid that depreciated 8000 the person would be discounted 8000 from there 100000 making them pay 92000? Or is it a percentage of the 8000 that is discounted from the total?

I am probably completely wrong.

If your Gross Income was 100,000 and your wrote-off 8,000 in depriciation then your Agusted Gross Income (AGI) would be 92,000. But remember you only can write-off your depriciation on a schedule C if you are using it for your business.

Prius 06 Black Pack#2

As MG48 pointed out you can only use the depreciation deduction against business income on a schedule C (business income schedule). Brinstar, as you mentioned you never paid taxes before and are in high school, so you probably aren't running a business.

So in other words, you can't take the depreciation deduction against income such as wages or investment income. So most likely the deduction will not be applicable to you unless your running a business.

Also, are you familiar with the tax credit from the new energy bill which might apply to you? See other threads for details. A tax credit is actually a subtraction from the tax that you owe which is much better than a tax deduction/write-off. In other words, it looks like the government will give you back approximately $3,100 for a Prius put into service in 06 or $2,200 for a HCH. Tax credit is better than a deduction.

Just a warning- Haven't researched yet, but the tax credit may be only available up to your tax liability. In other words, you have to have a tax liability up to $3,100 to get the full energy bill tax credit for a Prius. I estimate you have to make up to have income up to $28K before you pay taxes of $3100. I know taxes get complicated.

Does anybody know if the tax credit is a fully refundable credit, or only refunded up to your tax liability?

Is there a rule of percentages to how much you have to use the vehicle for business purposes to qualify as a business vehicle, and I pretty much work for her. But obviously this vehicle would be used for personel use aswell. How carefully does the fed watch the use of personell to business use of a vehicle?

It kind of seems to me that this big writeoff is directed more towards the companies with fleets of vehicles than the selfemployed which would use it as a personell vehicle.

I believe the tax credit is for 10% of the value of your car purchased in 2005. I think it dropped to 3% in '06. I believe others in this board inadvertently switched those two years around. Correct me please if I'm wrong. I have posted the tax laws in this newsgroup under its own heading so refer to the law if you would like.

This is the estimates for the new 2006 fuel economy incentives.

2001 Prius Photos       2005 Prius Photos
1992 Mitsubishi Delica Diesel-WVO Hybrid Photos

Well they better get it lined out!!!! If this turns into another goverment cluster ****. I wont be playing. The Oklahoma law is very clear on a hybrid. 15% of the purchase price of the car or $1500, which ever is greater, not to exceed $1500. Its a credit on the adjusted gross income. Which is BS to start with.

I think we need another revloution, kill some politicains and buracrats. This can be soooo simple but we hire folks and vote idiots in to make it a nightmare.

Cooling off and waiting to till 06 and see what it really will be.

REVELOUTION

[quote] Is there a rule of percentages to how much you have to use the vehicle for business purposes to qualify as a business vehicle, and I pretty much work for her. But obviously this vehicle would be used for personel use aswell. How carefully does the fed watch the use of personell to business use of a vehicle?

It kind of seems to me that this big writeoff is directed more towards the companies with fleets of vehicles than the selfemployed which would use it as a personell vehicle.[quote] from Brinstar


Brinstar:

I used to taxes and am a CPA. Basically, the deductible portion of depreciationof the car can be deducted for business is based on the percentage of business miles/total miles for the whole tax year. Commuting does not count as business miles. Also other vehicle expenses: fuel, repairs & maintenance, prop taxes, license fee, insurance, etc are deductible up to the same percentage.

Remember, you can't deduct this if your employee. You must be self-employed.