$3100 Prius tax credit question.

Pretend I did it in a state with no sales tax.

 

Yeah, OK B)

 

No, he may ask you to do a SERVICE, not a "favor". :lol: :lol:

Let's hope he doesn't ask you to put a bullet through Moe Greene's eye

 

Right...and I just watched it last night.

 

No aka007ii, thats not it at all!...
If you get money back, that just means you paid in more than your liable for.

You need to see how much tax your liable for.. if it its 3100 or more , you will get that "plus" what you paid extra...
so you can add 3100.00 to the amount you normally get back "if" your liable for 3100.00 or more!

Remember what you pay or get back at the end of the year is not what your liable for.. its the difference between what you paid in verses what you are liable for.
You will need to go back and look at your 04 taxes and see your tax liablity to get an idea of what 05 will be like.

 

But not too rich... if you make over "somewhere around 150K a year", then you will have AMT "alternative minimum tax"... the credit cannot go below that either.

 

Ha!... be careful Dave, your starting to sound like me....
I don't know if there's enough room on my soapbox for you! :lol: :lol: :lol:

 

It also has to do with how many and which deductions you take. I paid the AMT for 04 for the first time and the only reason I can figure is we have 3 "mortgages" despite the fact we only own one house. We used to only have 1.

 

For those of you who are confused about tax terminology and refundable vs non-refundable credits, I just posted in Fred's House of Pancakes about income tax basics. I apologize in advance if I have unintentionally insulted anyone's intelligence with the very basic information there, but it sounded like there were some confused people posting here and elsewhere on these forums.

 

yea.. I don't understand AMT well. I think it takes into account your "income", if it breaks a certain amount... all the deductions in the world do not release you from it.

Its uncle sams way of forcing the richer to pay something rather than get it all dismissed due to deductions and writeoffs.

The main part thats unfair is that cost of living in some parts of the country is 4 times that of other parts.
Just because you make 150K a year in New York, you still can't buy what you could buy for 50K a year in Texas or other areas. Another example of how blanket laws take from Peter to pay Paul... its really hard to make laws fair to all.

 

Thing is, my income has been the same for the past 4 years, but only last year did we pay the AMT. The only financial change was that we bought a timeshare last year that gave us our third "mortgage". Anyway, it's the only thing I can think of, we don't have any exotic investments, we have 2 kids, a mortgage + a home equity line, that's all. That's why it's so easy for me to do my taxes each year.

 

There's good coverage of AMT and related links in the Alternate_Minimum_Tax section of the Toyota_Prius_FAQ.

 

Sounds like your right at the "cusp" of getting dinged... maybe it would be worth at least 10 minutes of a cpa's time to review your stuff, or at least dig in and see just where the line is drawn for AMT. Maybe they moved the line just a bit and now you're in it?

 

The easiest way to figure out your AMT liability is to grab a pencil, calculator (unless you are not as calculator dependent as I am), IRS Form 6251 and its instructions. Complete the Form 6251 and see whether or not you have an AMT liablility.

Whoever said they didn't understand AMT is not alone. There are alot of people who have no idea it even exists until it pops up on their tax return or they get a letter from the IRS telling them they owe AMT.

More and more of middle income taxpayers are going to be subject to AMT because it wasn't adjusted for inflation for years. Its now being adjusted but incomes are rising faster than the AMT exemption is. AMT reduces some itemized deductions such as medical expenses and mortgage interest and changes the way some other things are calculated such as depreciation and income from exercising certain types of stock options (that's a real ugly one).

 

What paying the AMT meant for me was that I did the whole TurboTax thing and my "normal" tax was X dollars. It said my AMT was about X+ $250. So it was painless and it just reduced my refund a little bit.

 

There are two ways to avoid underpayment penalities
1. Owe less than $1000 or
2. Have withholding and estimated payments of at least 90% of your 2005 tax liability (line 62) or 100% of your 2004 tax liability (110% if your AGI is over $150,000 MFJ/$75,000MFS The 110% may have changed for 2005, but I don't have any references here so I can check that amount. I will check and post here if it is different).

The second way is fairly easy to meet for most individuals. It means that if you had at least 100% of your 2004 tax liability in withholding for 2005, you can owe the government more than $1000 without being penalizied.

 

Sounds like you may mean your AMT was 250.00? The minimum tax you must pay.
So if X is at least 3150.00 you should get it all except 250.00 of it?

 

Glad you see your penquins 's back!

 

I think he's saying that his AMT was higher than his tax calculated "normally" by $250.
If that's so, the credit will not reduce his taxes below (X + $250).

 

FYI, gift tax is paid by the giver, not the receiver.