Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Hybrid tax credit -- NOT ?
Old 10-26-2006, 10:52 AM   #1
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Hybrid tax credit -- NOT ?

Bought a Prius last January (06), and looked forward to a tax credit on this year's return.

Just heard from my accountant that I don't qualify cause I earn too much. Nothing I have ever seen about this tax credit (up to $3400) mentioned income qualifications for the credit.

Can anyone verify my accountant's advice? I can't find anything so far in my www search.
__________________

__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Hybrid tax credit -- NOT ?
Old 10-26-2006, 11:06 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,618
Re: Hybrid tax credit -- NOT ?

Search at irs.gov

I don't see any income limits either, though the credit is reduced because Toyota has sold alot of them. Since it is a credit, it should not be affected by AMT, or should it?


http://www.irs.gov/newsroom/article/...157632,00.html

http://www.irs.gov/pub/irs-pdf/f8910.pdf
__________________

__________________
LOL! is offline   Reply With Quote
Re: Hybrid tax credit -- NOT ?
Old 10-26-2006, 11:10 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Re: Hybrid tax credit -- NOT ?

Form 8910 doesn't have an income limit.

From the form, it appears that the AMT can negate or limit any benefit of the credit.


"If you cannot use part of the personal portion of the credit because of the tax
liability limit, the unused credit is lost. The unused personal portion of the credit
cannot be carried back or forward to other tax years."
__________________
eridanus is offline   Reply With Quote
Re: Hybrid tax credit -- NOT ?
Old 10-26-2006, 11:13 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Re: Hybrid tax credit -- NOT ?

Is this a good time to bring up the beauty of the simple National Retail Sales Tax?
Never mind.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Re: Hybrid tax credit -- NOT ?
Old 10-26-2006, 11:24 AM   #5
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: Hybrid tax credit -- NOT ?

If you pay AMT (alternative minimum tax), this can eliminate your credit.

For the maximum credit, tax your regular tax liability, subtract any other credits you are entitled to, subtract your tentative AMT liabity, and if you have a positive number you can use up to that amount of the hybrid vehicle credit. You would have to work through your 1040 and form 8910 to do the calculation. Basically, the credit can't reduce your AMT.

I really really don't like the AMT rules.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Hybrid tax credit -- NOT ?
Old 10-26-2006, 11:46 AM   #6
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: Hybrid tax credit -- NOT ?

Quote:
Originally Posted by Martha
If you pay AMT (alternative minimum tax), this can eliminate your credit.
Might be, though the CPA didn't mention the AMT specifically. We really didn't have unusual deductions or credits this year, but I guess it catches up to you.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: Hybrid tax credit -- NOT ?
Old 10-26-2006, 01:12 PM   #7
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: Hybrid tax credit -- NOT ?

Itemized deductions do get reduced for high income taxpayers. Starting in 2006, the deduction phase-out will be reduced by one third. In 2008, it will be reduced by two thirds, and in 2010, the phase-out will disappear entirely. But these rules don't apply to tax credits, like the hybrid car credit.

There are other credits, like the adoption credit, that are phased out based on income. I haven't seen an income phaseout rule for the hybrid vehicle credit. Only see that it is not a credit against AMT. It could be that you have been paying AMT for some time and your accountant pretty much knows you will be paying it again. That has been true for us.



__________________

__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
I'm in AMT Hell - anyone understand how to recover AMT Credit from ISO exercise? JB FIRE and Money 4 04-14-2007 10:39 AM
Roth Conversion Tax Part 2 halo FIRE and Money 0 11-22-2006 12:29 PM
New credit score available REWahoo FIRE and Money 15 06-22-2006 08:51 AM
State Tax Optimizer/Estimator ?? OldAgePensioner FIRE and Money 3 03-09-2006 12:12 PM
Credit card selection Skylark Young Dreamers 27 03-12-2004 02:10 PM

 

 
All times are GMT -6. The time now is 06:55 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.