Energy Bill and Prius

Hi there, welcome to PriusChat!

Quick reference:
Tax deduction: takes $2K off your taxable income.
Tax credit: takes $2K off the tax you owe.

Needless to say, the tax CREDIT is MUCH more beneficial. I sincerely hope they approve this as a credit, not a deduction! I guess we shall see in the future.

 

Why would buying in 2005 affect the 2006 tax year? Is it a deduction/credit every year you own it?

Regards,
Kevin in Oh-hi-o <><<
http://KevinArnold.US/

 

buying in 2005 will allow you to take a one-time credit on your 2005 tax return.

the tax deduction is currently set at $2000 for anyone who has purchased a Prius this year. but anyone who buys after december 31 will lose out on the $2000 deduction and instead only get a $500 deduction if the new energy bill does not pass.

that's why people are being encouraged to buy in 2005- bigger savings come tax time.

 

Too bad it isn't retroactive, but I guess that would cost the feds way too much money.

 

:roll: LAST YEAR (2004) Texas had an incentive but strangely for a limited total dollar limit for all - that is to say: "We will fund this many dollars in total for these incentives." My purchase occurred well past the last available funds.

Seemed to me to be very short-sighted to impose a total dollar limit rather that a continuing encouragement to get more "green" cars on the Texas highways.

 

If this turns from a $2,000 Deduction to a $2,000 Credit then I'm buying another Prius. No time to read the regs though. Waiting patiently for an analysis as it pertains to hybrids.

 

OMG! I just read the link that azemission posted. It is a TAX CREDIT! Reference pp. 1092-1093 for proof.

AMAZING! I hope my 2005 qualifies!

 

It sure looks like Prii purchased in 2005 would qualify. The bill talks about taxable year but I saw no reference to purchases must be after the bill passes or some such other effective date. I'm no lawyer, tho'.

I redid azemission's analysis for myself and I think he's right on. I was unsure about that inertia weight class stuff but did a Google on the phrase. I found a document that talks about the Prius being in the 3000 class:

http://www.epa.gov/otaq/cert/mpg/fetrends/r01008.pdf

This seems like a true Christmas in July. I guess I shouldn't complain about an incentive for me to already have bought my 2005 Prius. Maybe it's an incentive for being a forward thinker.

 

Well put exhuman, well put.

 

Can't this tax credit/deduction carry over if you bought a Prius in 2005, sold it in 2005 or 6 getting near MSRP price (or over!), and then buying the new 2006 model which would include your 2005 credit/deduction (depending on sell price) + 2006?

 

If it's anything like the present $2,000 tax DEDUCTION, if you sell your Prius within I believe 3 years time, you will have to prorate the deduction.

 

Do we know that this version of the bill has the "okay" to allow Cali to put hybrids in carpool lanes?

 

The Transportation Bill is the one that would allow states to allow hybrids in HOVs. Here's the latest on it:

http://news.yahoo.com/s/ap/20050728/ap_on_...ngress_highways

 

Great, a tax credit.

Cash in the pockets to ignore the larger problem at hand, which is the held off EPA report that the NYTimes leaked, stating that car mpgs are down, that 40% of all oil consumption goes into our vehicles, and that the energy bill on the table does nothing to fix the emission or mileage requirements.

See the link here:

http://www.nytimes.com/2005/07/28/business...UCh0tcazCxW4CxQ

How about we give our deductions and credits back if they promise to reinstate a form of mpg requirements?

-m.

 

rflagg, you are killing my buzz. But thanks for the dose of reality.