Anyone see this?

after Jan 1st its 3200.00 why would she want it before that?

 

Saw it.

The fact that a Bush energy bill had passed was duly publicized, but you had to read more than one newsapaper story, or see more than one TV new account, to know the details.

I wonder what % of adults know about the tax break. My guess is well below 50%

 

I knew about the tax credit and still opted to get a 2005 (which I received in late September) after weighing all of my circumstances. For example:

Using Kiplinger's TaxCut (based on my 2004 return), it turned out that I would only receive about $500 more if I waited until 2006. This was taking into consideration the current $2000 tax deduction (which is equivalent to a $300 credit in my tax bracket), the expected $300 increase in the MSRP of a 2006 Prius, and the fuel saving cost of the Prius over three months compared to my 97 Ford Taurus. Of course, this is also assuming that my financial circumstances and the tax code in 2005 and 2006 will be exactly like 2004. Interestingly, TaxCut didn’t give me the full $3200 credit. Unfortunately, I don’t understand the tax code enough to know why I didn’t get the full credit. I'm certain that I correctly inputted the amount in a field that was for a credit and not deduction. Perhaps this was an AMT issue?

Other factors included the unknown availability of Prii as of January 1, 2006. Would demand be so high that the local and semi-local dealerships would only sell the vehicle for above MSRP? Most importantly, would my Taurus with its ailing transmission even make it to January? That was a risk I was not willing to take!

 

50%???

in your dreams....


i be betting its less than 10%

 

I think generally people have a hunch that there is some kind of tax benefit to owning a hybrid car, but unless they follow the news closely, I don't expect them to know about changes brought on by the energy bill...

these people will also be unpleasantly surprised when they have 1 month and a week longer of daylight saving time too!

 

I find it difficult to believe that TaxCut has given you an acurrate portrayal of next year's tax credits. If I'm correct the final values for next year's tax credit haven't been established yet; however, the $3200 is a very good estimate. What type of savings would you see if TaxCut would have given you the full $3200?

 

That is IF the tax credit for the 2006 survives the Hurrican Katrina budget negotiations. I read that DC was considering scrapping the Highway bill or at least parts of it to pay for Katrina. If the tax stuff for hybrids goes bye-bye then those that bought in 2005 will have made a smart move.

 

As stated, I am basing all calcs on the 2004 return, so I know it's not going to be exact – maybe not even close to reality. Rather, the exercise was done to compare various scenarios. There is no field in the 2004 TaxCut specifically the 2006 credit (after all, that won't show up until the 2006 version of TC), but there are plenty of other fields that can be used for tax credits; however, I can't remember the exact one I used.

The actual amount back was about $1400. This was not what I was expecting. I figured that once I added the $3200 in to the credit field that same amount would be removed from my tax assessment (or in my case, added to the amount the government had to send back, since they already owed me money). Again, this could be an AMT issue because of all the other deductions and credits that I am taking. TaxCut automatically calculates the AMT if it is required.

 

Check out our topic over at http://priuschat.com/index.php?showtopic=1...ndpost&p=144885

We discussed the tax credit scenario a little more in detail.

 

You don't need a computer program to figure out how much the tax credit would save you. The deduction until 12-31-05 is $2,000. You said this would save you $300 which means you are in the 15% tax bracket. To see what the tax credit would do --you only have to go to Line 43 on the back of a 2004 1040 where it shows "total tax". If the total tax = $3,150 that is how much you would save. If your total tax is only $2,000 then the tax credit would be limited to that. Don't confuse total tax with tax due as all tax due means is how your withholding matches up with total tax. It would be a very unusal situation that a $3,150 tax credit would not be worth significantly more than a $2,000 tax deduction. Most people will save $2,000 to $2,500 by waiting until Jan 1, 2006.

 

According to my CPA a tax credit is just that, if you owe nothing you will get back 3200 tax credit for buying the prius, if you owe taxes that amount will be taken out of what you owe and the rest will come to you as a payment.

 

I beleive the reason that you are not seeing the entire $3200 reduction in your tax (estimate) is due to the Alternative Minimum Tax that kicks in for most taxpayers with any substantial level of tax deductions or tax credits.

Simon

 

Line 43 on my tax return is considerably higher than $2000. If you don't mind, I would rather use the computer program. This is what I just did.... I opened up my 2004 TaxCut return and added $3200 to Form 3800 1p - Current Year Biodiesel Fuels Credit (there were a bunch credits in this section -- I just happened to choose this one). Current Year Credit on line 8 of this form now shows as $3200. At the bottom of this form, Line 19, Current Year Credit is calculated by subtracting Line 16, Tentative Minimum Tax, from Line 13, Net Income Tax. This calculation came to $1804 (in my case). Please note that I was incorrect in my previous post... I should have stated an approximate savings $1800 not $1400. When I recalculated the the entire return $1804 was added to what the government owed me.

$1804 minus $300 (what I get from the 2005 deduction), minus $300 (expected increase of 2006 MSRP), minus $500 (approx Prius fuel cost savings and against the Taurus over a 3.5 month period -- including general maintenance of the Taurus). The total amount gained (in my individual case) by purchasing a Prius in January 2006 rather than September of 2005 is approximately $700 (I erred when I said $500 earlier). So yes, while I would have saved money on a 2006, it was nowhere near $2000.

I didn't take into account that a 2006 Prius will likely have a higher resale value than a 2005 (based on comparable options, miles, and condition), but I don't plan on selling my Prius for quite a long time) so this wasn't an issue for me.

 

Personally I don't care how you want to justify buying your 2005 Prius but you are making incorrect statements. By your own admission you know nothing about tax law. You have used a business tax credit from 2004 to determine your savings when it is a personal energy credit for 2006. I said line 43 (total tax) needed to exceed $3,150 not $2,000. If this condition is met, you get a dollar for dollar reduction in your tax. There is not an offset to this credit whereas in your calculation you reduced the credit from $3,150 to $1,804. On package #8 the 2006 Prius price has increased $316 from 2005. So most people will save $3,150 less $316 for the price increase for a net of $2,834 waiting till Jan 1st, whereas you saved $300 and got a year old car. hmmmm

 

First you said...

Well... Which one is it? You seem to be contradicting yourself. If it's your first quote, then it is conceivable that a person could save $1804 under certain circumstances. In your second quote, while you acknowledged the 2006 price increase, you still refuse to factor in the 2005 deduction and operating costs of a gas guzzler for 3.5 months. If you know of a credit in the 2004 tax return that would give a dollar for dollar reduction, please kindly advise. Or are you saying that there are none that can be used for comparative purposes?

BTW, there is no equivalent to a 2006 Package 8 in 2005, as leather is not an option in 2005. The equivalent to the 2005 Package 6 is the 2006 Package 7. (Source: http://pressroom.toyota.com/presstxt/2006t...006prius_fo.pdf )

The Kelly Blue Book private party for a 2004 Package 1 with 15,000 mi. is $ $23,355. I paid $22,651 for my 2005 Package 1. I'm not too worried about a "1 year old" car when a 2 year old Prius sells for more than what I paid a month ago. (Source: http://www.kbb.com/kb/ki.dll/kw.kc.ur?kbb....rius&2;TO;PR&&& )

I doubt that any dealer would give me a purchase order in August of 2005 for a 2006 Prius at MSRP in January. In August, the dealers did not know the cost or the option packages. I received my Prius in 30 days after placing the deposit and paid MSRP. Sure, I could have stayed on a waiting list until the first shipment in January, but I would have had no way to know for sure that the dealership would not change its policies. Considering that an increasing number of dealerships are marking-up the Prius $2,000 to $4,000 over MSRP, along with the high demand that's sure to occur in the first quarter of 2006, I did not want to take that risk. With the transmission in my old car ready to die any day, the thought of holding out until 2006 was also much more of a risk than I wanted to take. I belive I made a sound decision. Whether you see it or not really isn't my concern.

 

Well, I gotta admit, LaughingMan, you gave me a chuckle - and I agree with you and the others who believe a majority of folks are pretty clueless when it comes to the tax credit - to say nothing of the coming change to DST.

And to you, NotFuelish, there's no need to justify your decision to buy an '05 without waiting for next year. Are you happy with your new Toy? If so, then don't revisit the decision. Even if it turns out you could've saved some bucks by waiting, you got rid of the old clunker and got instant gratification; unlike me who'll continue to be a frustrated Prius-Owner-Wannabe until January.....
Have fun with the Pri!

 

I guess I was fairly lucky - I signed on 9/12/2005 for a 2005/06 (later we clarified my choice as a 2006) and I got MSRP whenever it was delivered.

Signed Agreement

 

I have a signed sales contract from Sept where they will sell me a 2006 package #8 for MSRP. I will not take delivery until Jan 1st. Although highly unlikely, if Toyota raises the price significantly, I have the option of cancelling. I used to own a Harley. I always liked the bike but some of the people who rode them were from a defective gene pool. I hope NotFuelish is not a typical Prius owner. BTW NotFuelish -although leather was not officially an option in 2005, it was installed by many distributors-such as Gulf States which distributes all Toyotas for the Southwest. I always said the credit was $3,150. You are the one who reduced it to $1,804 with you trusty software program. A little knowledge is a dangerous thing.