So after getting my taxes done, I found out that I won't be recieving my $787.50 credit. I graduated in May and started working in July. Since then, I've paid off a bunch of interest from my student loans. Because I paid off more in student loans than I paid in federal taxes, i'm recieving all my federal taxes back(no complaint there). But that leaves no room for my Prius credit to take affect and thus I won't be getting anything for it. How much of a load of crap is that? I'm thinking of writing a letter to the IRs explaining it. The way the system is setup it doesn't make it beneficial for young, recent college grads to buy a hybrid. If you don't make enough money to recieve the credit your SOL.
you mean it doesn't make it beneficial for *anyone* who doesn't make a certain amount of money to buy a hybrid. -people who don't make enough lose out -people who make too much lose out to AMT like most things, it applies to everyone but most are excluded. damn that's a lot of student loan interest though. the student loan interest deduction would have to equal your income to completely knock out your tax. unless you've still got education credits to claim too.
It's a tax credit. That's the way they work, with only a few narrow exceptions, such as the Earned Income Credit for low income wage earners. You knew this when you purchased your Prius, or you should have known it. It's not like the rules were changed in the middle of the game. Tom
Not quite, though. You still have standard deductions and personal deductions (if independent), which add up to about $8000 per person if single. With the SL deduction, education credit, and an entry level job after graduation or during a summer, it's entirely possible to have zero federal liability before touching the hybrid credit. We hit the AMT ceiling on our 2006 taxes with the Prius credit. We qualified for $3150 but then couldn't find enough above the line, non-AMT deductions to make it work. Just taking the education, child, and student loan benefits was enough to knock off half the credit. I still think it was Congress/W's plan to screw all the vegan, latte-drinking, DFH Californians and New Yorkers who ran out to trade in their VW Microbuses and get their fruity newfangled cars and were too busy smoking pot to do their taxes a year ahead of time. But I'm not bitter.
Since I'm retired, the problem I had with the credit was that I didn't have enough taxes due to utilize the full credit. The solution was to convert enough standard IRA money into a Roth IRA. That made taxes due on the IRA, and I calculated it as just enough to use up the Prius credit. Roth is a really good deal if you can use it. You pay taxes on the money when you create the Roth, but thereafter all money earned in the Roth is tax free. If you just move enough to not quite reach the point where you actually owe taxes on it, then you've insulated the money from ever being taxed. One of the rules about a Roth is that you have to create it by the end of the tax year. That means the end of December, NOT April 15. So if you haven't nailed down all the numbers by the end of December, then you don't know exactly how much to convert to a Roth. Never fear, you just overcontribute to the Roth, and then recharacterize (undo) the overshoot when you've got it all figured out (April 15 or whenever you actually file).
You got a great car and you will continue to get great mileage. You pay less tax on the fuel you get for the Prius, what is wrong with that? I wish I had such a problem, the government paid back all my tax and they won't give me back any more, that's tough.
Maybe you should be thankful that so many of us foot the bill for your social services, government operations, national security, funded your college education expenses ... It's a tax credit. You paid no taxes. End of story. You didn't get screwed. Come back next year, when you actually have to pay taxes, and let us know if you feel less screwed than you do now. I love giving the government $15,000 each year so they can buy stuff for other people.
It's a credit against your tax bill. If you have no bill, you don't have a credit. I can just see me, at some service counter, " I have a credit here for $25." "I'm sorry, you don't have an account with us." "Well, that doesn't matter, you need to refund me $25." "But, you didn't pay us $25 to begin with, how can we refund you money that you didn't give us?" "That's not fair! This credit doesn't help me at all!" Life isn't fair, Princess. Anyone that tells you it is, is trying to sell you something.
Student loan after college: $$$$ Hybrid rebate while having no tax liability: $0 Learning how the IRS operates: PRICELESS
Is there no way to defer the credit? As an Oregon resident I was given the option to defer the state credit for a few years if I couldn't/didn't want to apply it to 2007 taxes... I was able to get full credit for both Federal ($788) & State ($1500) so I am a happy camper! Maybe you could have deferred your student loan interest paid to 2008 (or a portion thereof) so you could get your $788...? I am able to carryover capital gains/losses to the next year, just something to check out...
If you look it up on the IRS website then you should search for the term "carryover." Unfortunately, very few credits carryover. Deferring the student loans would have been a good idea but it sounds like the interest was already paid for 2007.
I just traded in my 2005 Toyota Prius - for which I received the taxes I paid in addition to a bit of money back into the car... ($3150 in cold hard cash)... but now... I think I'm gonna be sad when I do my tax year 2008 taxes in 2009... *heh* *bla bla blah* *gripe gripe gripe* Our country's tax laws and lawyers needs to see the axe-men... this tax on the income side sucks... let's penalize people for making and saving money... but make money tax-free for those who spend it "properly"; or better yet! a tax credit to those who "spend it properly". Although I think in principle, tax credit is a good way to stimulating a revolutionary product that can have significant impact on society and the way it consumes energy or social changes. But... *blah*
Definitely can't carry this one over. I think the 8910 instructions even say as much. They even rigged it so that if you hit the AMT, the lost credit is not classified as AMT, but rather a reduced credit. In other words, instead of taking the full credit and adding AMT back on, you just reduce the credit. This is important because, normally, if AMT is a rare occurrence for you, you can claim a credit on part of it the next year. For example, if you have a 3150 credit and can only take 1500 because you hit the AMT, your credit is 1500. If it were the other way, your credit would be 3150, your AMT would be 1650, and you could claim a partial credit on the 1650 the next year. The Republican Congress did that to make the amounts look good on an individual basis, but keep down the overall cost of the program by creating more exclusions. Combined with the sales cap, they did everything possible to keep this credit to a minimum. Same reason they did nothing for 6 years about the general AMT. Tell the middle class they're getting a huge tax cut, but take it back out of their other pocket while they're not looking.
well, Ive been hitting AMT for a few years- figures that my Prius purchase wont get me the credit. AMT= "Abuse the Middle-class Tax"- it doesnt effect low-income earners- and the REAL rich make enough that it doesn't effect their style of living. "The income tax is not so much a tax on the rich, as it is a tax on those TRYING to get rich. Therefore, the progressive income tax is the enemy of the middle class." Leona Helmsley wasn't kidding when she said that only the little people pay taxes. To the original poster- dont worry- you WILL be getting an economic stimulus tax rebate from W- lets just say that your portion of that came out of MY Prius tax credit that I'll never see because of AMT. You're welcome. and by the way- although I earn enough to get squashed by the AMT, I can't afford a package #6 like you have- i am getting a package #4- see- i have to spend MY money on a house, family, food, etc. SO since you are CHOOSING to blow your limited income on the LUXURY version of this car, dont come here complaining that you are not getting a chunk of MY taxes for doing it (this is all speculative anyway as the credit would probably be almost phased out completely by now.)
