Hey there, I thought you guys could explain something to me in very simple terms. I want to get a Prius soon (I have the money now). I am 19 but havn't had to file taxes yet. So my question is: how should my parents go about filing the tax credit of $3,150 assuming they get the car within the first 60,000 units? They should give them a paper stating they are within the 60,000 or does it go by VIN? And then we put that on the 06 tax forms somewhere when they fill it out for 2007 taxes? Is there any way that even within the first 60,000, we might not get the FULL $3,150? If so, please explain. Also, I know someone sends a list every month on the Yahoo! group or so of how many Toyotas have been sold etc., but can someone please just give me ONLY the figures that deal with how many hybrids were sold for Toyota and Lexus (they're combined right?) per month if possible so I can make a guess as to when the full credit will phase out. Basically, as simple as you can put this for me so I can explain it to someone else, but with enough detail in places like how to get the proof of within 60,000 and filling paper work etc. Thanks so much to all of you in advance! DANE
Ditto for me, my prius is going in my mother's name so that the tax credit can be recieved... (my taxable income for 2005 was like 300 for working one week at a simmer camp... so I dont qualify for a tax credit it seems, amazing how you have to have money to save money, grr!
This is why god made... the accountant. Mine will deal with the deduction ('05 purchase) and not getting penalized by the irs for selling the car this year.
How about "no sooner than October 1, 2006." The credit doesn't phase out until the end of the quarter AFTER 60k cars is reached. Since they won't reach that number by the end of March, the soonest they could hit it is June 30. The quarter after that ends on Sept 30. So buy before then and don't worry about the phase-out.
The credit cannot reduce that regular tax paid below the tentative minimum tax for the taxpayer. So your parents need to undestand how close their regular tax liability will be to their tentative minimum tax. The credit cannot exceed that difference according to the tax legislation. This should be clearer once the IRS has produced instructions on how to calculate the credit. Searh around -there are many posts on this subject here. The $3,150 is the estimate (from many sources) and the IRS will have to agree with the calculation of that. I imagine when they certify cars (like they have for the 2005 and earlier deduction) they will state the credit amount for the car to make it simpler.
Right. And just to be clear, if your parents want to get the tax credit, then it has to be your parents who actually own the car. Maybe that's obvious, but since you (Dane) were refering to the Prius as your car and saying that you have the money now, I wanted to make sure that you know that if your parents want to claim the credit then I think that they have to be on the bill of sale. Of course, if you're a dependent, maybe they can claim your tax credit, but I wouldn't count on it.
No one mentioned Alternative Minimum Tax (AMT) If your parents' income is such that they must pay the AMT the tax credit could be affected even to the point that it could be eliminated. They will very likely know if they are affected by the AMT.
