Irs Announces Tax Credits For Toyota Prius

Irs Announces Tax Credits For Toyota Prius

IRS Announces Tax Credits For Toyota Prius
The Toyota Prius is​ the​ vehicle that started the​ entire hybrid vehicle craze .​
It continues to​ dominate the​ market and the​ IRS has announced the​ tax credits for this year.
IRS Announces Tax Credits For Toyota Prius
In an​ effort to​ promote energy efficiency,​ the​ federal government has instituted an​ energy program that provides financial rewards for energy efficient products .​
The government realizes prodding us with words is​ not going to​ work .​
As such,​ it​ has decided to​ issue tax credits to​ motivate us to​ conform our activities to​ the​ desired goal .​
In this case,​ reducing our oil dependency is​ the​ key .​
The Toyota Prius was the​ first mass production hybrid vehicle .​
It was such a​ hit that Toyota could not come close to​ filling orders the​ first few years .​
This is​ still the​ case to​ some extent,​ a​ reflection of​ our rising environmental consciousness and high gas prices .​
The tax credit you​ get with a​ purchase provides another reason to​ buy this peppy little vehicle .​
The IRS issues tax credit amounts for hybrid cars that meet its standards .​
Various manufactures have been approved including Ford,​ Lexus,​ Honda,​ Mercury and,​ of​ course,​ Toyota .​
In this case,​ the​ tax credit is​ $3,​150 .​
You must purchase the​ car new from a​ dealer to​ qualify for the​ credit and the​ sooner,​ the​ better .​
The tax credit is​ graduated,​ which means it​ gets reduced as​ more cars are sold through the​ year .​
The full credit is​ only available through the​ quarter of​ the​ fiscal calendar of​ the​ year after which Toyota sells the​ 60,​000 car .​
If you​ buy in​ the​ following two fiscal quarters,​ you​ can only claim half of​ the​ tax credit .​
The subsequent two quarters see a​ reduction to​ 25 percent of​ the​ tax credit .​
After that,​ you​ cannot claim any of​ the​ credit.
It is​ important to​ understand the​ difference between a​ tax credit and a​ tax deduction .​
a​ tax deduction is​ taken from your adjusted gross income,​ which helps a​ bit .​
a​ tax credit is​ a​ dollar for dollar reduction of​ the​ amount of​ tax you​ owe .​
In this case,​ the​ tax credit could be used to​ reduce a​ 10,​000 tax bill by $3,​150 to​ $6,​850 .​
That is​ a​ huge savings any way you​ cut it .​
Obviously,​ hybrid vehicles are hot sellers and make sense on​ a​ lot of​ fronts given outrageous gas prices .​
The tax credits that come with each purchase certainly adds to​ their popularity.

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