Confusion on Tax Credit

According to Intellichoice, Prius is not an expensive car. Prius won the award for Best Car Value under $23,000 for 2005. Prius had an estimated 5-year ownership cost of $22,807. Click here.

Let's compare it to, say, Ford Focus ZX3 S with a target price of $12,758. Is this a cheap car compared to Prius? Intellichoice estimates the 5-year ownership cost of this Focus at $23,657 (click here), or slightly more than the Prius.

Sticker price is not necessarily indicative of the ownership cost. :blink:

 

Ford is not something I would even consider. I drove a Civic for 12 years, and my current car is Pontiac Vibe, which is essentially Toyota Matrix. Compared to those cars, Prius is expensive, especially for the package #7 which I'm planning to get.

 

2005 Honda Civic EX w/Side Air Bags (Auto).
- target price: $17,506
- 5-yr ownership cost: $23,450
- URL

In this comparison, the base Prius is not expensive compared to this Civic.

It's your choice to add all those options to your Prius. It's not clear to me how to get the sticker price of a similarly equiped Civic.

 

Poor?.. are you kidding?.. you don't make enough to be poor!!! :lol:

I was just talking to my mom today and she was telling me how a guy who stands on the street corner begging with a sign.. got picked up in a nice Catallac at the end of the day... she thought it must be his wife!!!!!

No.. .... that seems like a nice income!... and it goes farther based on where you live!....

It takes double, triple, even quadruple or even more to live in a reasonable house in one place verses another!... thats why the AMT is not exactly fair... although I don't make enough either to have it bother me!...

No.. like I said.... I am not a tax genius.. but based on what you have told me....it sounds like after the dust settles you still have a liablity of 2500.00?.... I would assume you would get all of that absorbed by the tax credit and have a liability of 0.00...
I would normally think even a refund of 600.00.. but I think the AMT of 0.00 "assuming thats what yours is?", will be your limit, so they will not go below that as far as your liability.

Its stinkin hard to make it these days with everything so expensive!...
I would struggle if not for the fact that both me "and" my wife work hard... and I made a nice real estate deal which helped out a few years back when I sold my land and home with my self made hydroelectric system on it.

And there is definately more to life than working all your time for toys... like family time and vacations!!!

But only you know what you can afford... I have never regretted going the max I can afford.... but if you go above that... it takes the sweetness out of what you bought because the initial sting never goes away.. and what was going to be a blessing turns into a curse!...

And the credit cards.... :angry: :angry: :angry:
That is bondage in the full sense of the word!!!
I just hope you can afford getting one.. if not.. I hear rumours the price will be coming down after 2008... but I don't know?

Let me know if you manage to pull it off... I have never been able to afford such a car until now.... and I"ve been working for 35 years now.....

 

I agree... I think the AMT rule should be excluded if you AMT is 0.00.... a credit is a credit... period! Its not a deduction!

 

Yes, I've thought about that. Right now we claim zero deductions, so the withholding is pretty big (nice interest free loan for Uncle Sam), but every April we get a nice hefty tax return. Anyhow, I'm just going by our CPA's advice. He know smore than I do about this stuff, and I trust him, so I rely on his advice.

 

Remember..the 1000.00 you may owe is not the real figure... thats how much "more" you owe that you didn't pay during the year with your W-2 witholdings!

I think its easier for "figurings sake" to ignore the numbers that depict what you do or don't get back... That only adds confusion.. since many don't realize what they really pay is much more than the tiny amount they pay at tax time because they failed to pay enough in during the year.

You need to look at your final tax liability After all your other deductions... if that figure ends up that you still are required to pay something above the 3100.00 figure, then you would get it all back. Most fall into that catagory... If you look at your check stub and see how much goes to federal.... most folks will have more than 3100.00 witheld during the whole year.

Now lets look at it from another angle:
Now after you do your taxes and after your deductions you will come up with a tax liablity.... the Tax liablity is what you owe in taxes to Uncle Sam. What you owe "minus" what you witheld during the year determines whether you overpaid or underpaid.. Thats the figure most are aquainted with that determines whether you have to cough up more, or whether you get that vacation or new toy! That figure is irrelevant figuring the tax credit...

All that really matters is what your tax liablitity is!.... deduct 3100.00 off of that figure.. Now deduct what you paid in during the year.... any of that amount that is not below your AMT or 0.00 it's yours! At least this is how I have it pictured in my mind... But I"m not a tax guy.

 

Yes you would.. thats the way I'm figuring it.

As long as "like Kiloran says" your AMT is not more than 2000.00

5000.00 paid in minus 2000.00 AMT (minimum amount allowed to pay under any circumstances).. that leaves 3000.00 that the credit can absorb.

 

Have you considered a 3rd party NAV for under $1000? It's probably not as nice as the integrated one due to exposed wires and lack of voice recognition. However, it is portable so you can take it with you in rental cars. Since you don't want the other features of Package #7, it's a big saving in up-front payments.

(Yeah, I know this is way off topic.)

 

Nah. I thought of posting the same thing. B)

 

Thanks for trying to save money for me. Since I can afford to "waste" a few thousand dollars for nicer features, I'm going to stick with package #7.

 

yea... I don't know about "waste" any more than anything else we buy!

Unless we are willing to live in a shack with sticks with a dirt floor and mud walls.... we must admit vitually everthing we buy is a luxury!

No one in this country should feel guilty for buying what they want
unless someone they are responsible for will do without the basics to pay for it!...

In this country the poor man is rich compared to many other places..... this is America... the land of milk and honey!

We all need transportation.... if its a value to live in a nice house.. driving a nice car should be no different.

If you can afford it... its not a waste.... its very nice technology and its not cheap.. it cost something!

Don't worry be happy!!!! B)

 

Hi all,

I have read enough about the 06 tax credit so that I feel I have a basic understanding
of it. I am on a waiting list currently, and am in touch with a dealer via email. He sends
out emails to all on his list with updates on what cars are in, etc.

Today he sent an email saying he has (2) more 05's available, and at the end of the
email he wrote the following:

"Currently, the IRS tax guide states a $2,000 deduction for Hybrid vehicles through 2005 and that in 2006 that will change to a much smaller number of $500"


This seems to be at odds with everything that I have read about the 06 tax credit to date.
I wonder if anyone else has heard such news? I wonder also if this is a ploy to sell the
remaining 05's, making this year's tax benefit look much better than next year's. Last
minute ditch tactic?

Perhaps someone might shed some light. I am not taking what he wrote seriously at the
moment.....

 

He's quoting from the law that was supplanted by the Energy Policy Act of 2005.
He may know better or he may be lying (probably the former).
Had the Energy Policy Act of 2005 not been made law, he would be correct.
He is in error, however. B)