Tax Credit For New Prius...I'm So Sad now :(
 

just bought an 05 prius this weekend. Was excited to hear about the $2,000 dollar tax credit. If you buy after 2006 they are giving you even more money. Check out this link. I believe prius owners buying after the new year get 3150 if I remember right. BUMMER for us who just bought.

http://hybridcars.about.com/gi/dynam...ed.htm%23table

You need to be able to view pdf files to see this, however. so make sure adobe reader is installed.

Re: Tax Credit For New Prius...I'm So Sad now :(
 

Brace yourself - it's worse than that. In 2005 that $2000 is a DEDUCTION, not a credit. If you're in the 25% marginal tax bracket, that's a $500 tax savings. 2006 is a CREDIT, so a tax savings of $3150.

Mike

Re: Tax Credit For New Prius...I'm So Sad now :(
 

caveat emptor, due diligence. Pick either catchphrase.

Re: Tax Credit For New Prius...I'm So Sad now :(
 

how does that work? they kept telling me i'd get 2 grand back from buying the car. where does it get narrowod down to 500?

Re: Tax Credit For New Prius...I'm So Sad now :(
 

Example:

I make $1,000 and the tax rate is 10%. Ahhh, trickle-down, you gotta love it!

If I have a $100 DEDUCTION, then that comes off the $1,000 for a total of $900 TAXABLE. At 10% the tax is $90.

If I have a $100 TAX CREDIT, then that comes off the bottom line of the taxes. So, $1,000 X 10% = $100 less the $100 tax credit = I PAY $0 IN TAXES.

That being said, me and the missus bought 2 hybrids in '05, so we do feel your pain.

Don

Re: Tax Credit For New Prius...I'm So Sad now :(
 

They were mistaking a deduction for a credit.

Basicly, a deduction gets subtracted from your taxable income. While a credit gets deducted from what ever taxes you ended up having to pay.

$500 is the amount of money you can expect to save on your taxes if $2000 got Deducted from your taxable income in the 25% tax bracket. Think if it this way 2000*.25= 500

Confusing? Yes. Thats why dealers probably got it messed up too. Also, when I bought my 03' the H&R tax examainer had no idea about the deductable. So it's basicly up to you to find out the info. At first the H&R person put it down as a credit. I found out it was wrong and had to ammend my taxes :(

Re: Tax Credit For New Prius...I'm So Sad now :(
 

On top of that, car salesmen aren't restricted by facts -- they'll say ANYTHING.

Don

Re: Tax Credit For New Prius...I'm So Sad now :(
 

I do believe however that individual states do offer CREDITS on state income tax forms for 2004/5/6 hybrid purchase. Colorado does.

Re: Tax Credit For New Prius...I'm So Sad now :(
 

Good point

Re: Tax Credit For New Prius...I'm So Sad now :(
 

Not so sad here. Opportunity is knocking!

I'm in the process of upgrading from an '05 to an '06. I'll take my $2000 deduction for '05, and the $3150 (or so) off the bottom line of tax owed from '06, plus a state "sales tax" exemption (legislature still working on it) of up to $1000. :lightbulb

The sticking point will be trade-in value. But, hey it's fun to negotiate. There are 3 very competitive dealers within 30 minutes (max) of my location. Sure like the Barcelona Red and the rearview camera.

Denny