For years now my father has been doing my taxes and I've been out of the loop with it all. I'm single and just bought my Prius in August of 2005. I've been going nuts trying to figure out what Federal tax forms I need to use in order to get my discount. I'm really at wits end... I've searched all over the forums and couldn't come up with anything. Could someone please help this newbie out??
My advice, spend the $35 bucks for TurboTax. First, the price of tax preparation materials is deductible, so right there you'll save about $7 on taxes. I downloaded the update and it has the question about buying a hybrid. Who knows, it might find some deductions you missed...but it is so easy...and they'll offer you an audit protection plan if you're worried you did it wrong...for a price.
1040, line 35 - enter "$2000" and identify as "Clean Fuel" IRS.gov - Clean Fuel Tax Deduction For Hybrid Vehicles
So the highlighted section below is where I'd include this info? The 2005 form looks different from what the IRS had on its website. It also says to attach form 8903. Where do I find that?
I don't believe we need to fill out 8903. THat form applies to the "Domestic Activities Deduction" (line 35). THis deduction is "to the left of line 35" so I was just planning to write in "clean-fuel $2000" and inclue that in the sum in line 36 (putting nothing to the right of 35 on that line).
I also have to mention that when you do TurboTax or TaxCut, it will import your last year's return and bring in any carryovers, personal information etc and that saves a lot of time. Doing my return last year, TurboTax imported from my previous return over $400 in Capital Gains losses that were carried over from the previous year, but was over the limit you can claim in one year. I don't want to seem like a spokesman for computer tax software, but for the price you'll spend so much less time doing your taxes. Once I get all my paperwork, it takes me about 45 minutes and it's all printed out nice and neat.
I also have to mention that when you do TurboTax or TaxCut, it will import your last year's return and bring in any carryovers, personal information etc and that saves a lot of time. Doing my return last year, TurboTax imported from my previous return over $400 in Capital Gains losses that were carried over from the previous year, but was over the limit you can claim in one year. I would never have even thought to look for that. I don't want to seem like a spokesman for computer tax software, but for the price you'll spend so much less time doing your taxes. Once I get all my paperwork, it takes me about 45 minutes and it's all printed out nice and neat.
Thanks everyone. This is all very helpful. I'll have to look into the software route. Since I can be so anal about paperwork it may be a good solution for me. It sounds like a good way to keep organized.
As a tax professional, I'd just like to add a couple of things to think about when considering software. First, even if you have the best software in the world, you need to know something about tax law to correctly enter the data and then to review your return to be sure all the numbers have gone where they were suposed to go. Just answering one question wrong simply because you didn't completely understand what it was asking can cost you a considerable amount of money. A good tax pro just might be able to save you the cost of having your taxes prepared by reducing your tax liability through taking advantage of things in tax law. My experience is that for every person who can do a tax return correctly and achieve the lowest legal tax liability, there is at least one who ends up doing ti wrong. So, if you are willing to invest time into learning the tax law that applies to you, then buy software and do your return yourself and I support your decision. But if you just want to enter data into a program and assume that the software will handle it correctly, you might want to have a knowledgable tax person review it or even prepare it. Even though I would be out of a job, I wish income tax code was simpler. Also, to clear up a small misunderstanding - the money you spend on tax prep software, books, or third party tax preparation is deductible on Schedule A, but it comes under the the area where your deductions have to exceed 2% of your adjusted gross income before anything is deductible. Good luck.
We had our taxes done by H&R Block 4 years ago after doing them myself on Turbo Tax for the previous 4 years. Watching them do it on their computer, I actually wondered if they had just copied TTax on their computers and were just entering the data. Final bill was almost $400. Now my tax situation is my income, a 401k, some piddling little mutual fund, a mortgage and 2 kids. If I had complicated investments and lots of real estate etc, I'm sure I'd go back to a tax pro. I just can see spending that much money for a tax return that is probably one or two steps above a 1040EZ.
Those huge increases in tax prep fees are one of the reasons I no longer work for Block. There are many choices in tax prep companies whose fees are considerably lower. One advantage with a tax prep company is if you get audited, most companies will send someone with you to the audit. They will also help you deal with any correspondence from the IRS or state. We don't charge for either service. And if you owe taxes because the preparer made a mistake, most companies will pay interest and penalities.
Turbotax offers a service called "audit defense" for $30 - $40 depending on the complexity of your return. You may check it out at http://tinyurl.com/bwr2b I do not work for Intuit or any related service.
Don't know if this will help but i found this today on the web. This may have been posted earlier but I'm too new to the board to know where to look. If its repeat post, forgive me. If its new and it helps, your welcome. http://www.treas.gov/press/releases/report...%20guidance.pdf I've had my Prius for almost 5 days and this morning it was blessed with its first ding on the hood. Yeah me too. got to love those dirt haulers. Anyway has anyone boutht and used a bra? Any advice...thanks Oh Oh, almost forgot ...do Prius owners signal one another as a freindly greeting on the raode? You like the old VW bugs used to do and now PT Cruisers. Should i toot or blink my lights, wave frantically or just ignore another Prius?
