Stupid Prius Owner needs help!!

[Cheap!]

Ok the sky is blue, I get that, that makes sense.

Tax credit... Search on Priuschat.com, I get that, that makes sense.

Read what is written there, I get that, that makes sense.

Understand what is written there, I don’t get that. WTF.

AMT, OWED TAX, TAX LIABILITY. ?!?!?!?!?!????

OK SO I’M STUPID! ARE YOU HAPPY NOW!

I just don’t get it. Do I get a tax credit or not.
I pay my taxes every paycheck.
I get back about $45 bucks at the end of the year.
My personal deductions are more than my itemized deductions.

At the end of the year do I fill out my paperwork and get back a check for $3,200.00?
If not, why not. I still have two months left in 2006, do I have my job stop taking out taxes for the last two months and try to get back some of the tax credit for the Prius or not.

I have read the other threads and it is not more unclear then ever. Like I said I must be stupid!

Someone please explain this stuff to me, for me, about me. Will I get a large check back for my 2006 tax return? Do you need more information, what information do you need?

[eagle33199]

Trust me, you aren't stupid, you just aren't a tax accountant.

You can think of it like this:

AMT is a "floor" - it's the minimum amount that you have to pay, regardless of any credits or deductions which may take you below it.

The only way to figure out your AMT is to actually go through all the steps and figure it out. check out http://www.irs.gov/businesses/small/articl...=150703,00.html, it spells out the specifics for AMT a little better.

[Beryl Octet]

<div class='quotetop'>QUOTE(Cheap! @ Oct 31 2006, 10:49 AM) [snapback]341239[/snapback]</div>

Ok the sky is blue, I get that, that makes sense.

Tax credit... Search on Priuschat.com, I get that, that makes sense.

Read what is written there, I get that, that makes sense.

Understand what is written there, I don’t get that. WTF.

AMT, OWED TAX, TAX LIABILITY. ?!?!?!?!?!????

OK SO I’M STUPID! ARE YOU HAPPY NOW!

I just don’t get it. Do I get a tax credit or not.
I pay my taxes every paycheck.
I get back about $45 bucks at the end of the year.
My personal deductions are more than my itemized deductions.

At the end of the year do I fill out my paperwork and get back a check for $3,200.00?
If not, why not. I still have two months left in 2006, do I have my job stop taking out taxes for the last two months and try to get back some of the tax credit for the Prius or not.

I have read the other threads and it is not more unclear then ever. Like I said I must be stupid!

Someone please explain this stuff to me, for me, about me. Will I get a large check back for my 2006 tax return? Do you need more information, what information do you need?
[/b]

I didn't think you got the 3200 back, but you got a 3200 deduction off of your income... Warning, I only do what turbo tax tells me to, and I usually strive to owe just a bit. I was an '05'er, also, I thought it was 2500 then, but they say the memory is the first thing to go, and I forget what the second one is.

[eagle33199]

<div class='quotetop'>QUOTE(Beryl Octet @ Oct 31 2006, 11:59 AM) [snapback]341247[/snapback]</div>

I didn't think you got the 3200 back, but you got a 3200 deduction off of your income... Warning, I only do what turbo tax tells me to, and I usually strive to owe just a bit. I was an '05'er, also, I thought it was 2500 then, but they say the memory is the first thing to go, and I forget what the second one is.
[/b]

No, it is a full tax credit for 2006. That means that he'll get the full amount (3150, i believe) taken off his taxes, and most likely refunded to him.

In 2005, it was only a deduction, which is where your confusion comes in.

[Jeannie]

<div class='quotetop'>QUOTE(Beryl Octet @ Oct 31 2006, 10:59 AM) [snapback]341247[/snapback]</div>

I didn't think you got the 3200 back, but you got a 3200 deduction off of your income... Warning, I only do what turbo tax tells me to, and I usually strive to owe just a bit. I was an '05'er, also, I thought it was 2500 then, but they say the memory is the first thing to go, and I forget what the second one is.
[/b]

The 2006 'benefit' is a tax CREDIT, not a tax DEDUCTION.

If the OP does not have income high enough where AMT kicks in, if he figures out his taxes and, for example, they are $5000, and the only other 'credit' he has is the amount of federal tax that was withheld (for example, $4000), then when he calculates the 'bottom line', it will be $5000 - $4000 credit for tax withheld - $3150 credit for the Prius purchase, so he has an 'overpayment' of $2150, which he may choose to receive as a refund, or to apply to his next year's tax.

I'm NOT a tax accountant, so I don't know anything about AMT. I took an early retirement, and this is the first year that I've worked full time, so I'll have to figure out the AMT thing when I file for 2006, most likely! So I MIGHT get some refund because of the 2006 Prius tax credit, and I might not get any. I'm not spending any anticipated tax refund yet!

[Cheap!]

<div class='quotetop'>QUOTE(eagle33199 @ Oct 31 2006, 10:01 AM) [snapback]341250[/snapback]</div>

No, it is a full tax credit for 2006. That means that he'll get the full amount (3150, i believe) taken off his taxes, and most likely refunded to him.

In 2005, it was only a deduction, which is where your confusion comes in.
[/b]

Thank you both, I am trying to do the AMT work sheet right now and now I have to look up definitions for what they are talking about.

Did you receive or claim any of the following items in this tax year? No I haven’t claimed anything yet. Or do they mean will I claim?
Accelerated Depreciation – I have no Idea what that is.
Stock by exercising an incentive stock option and you did not dispose of the stock in the same year - I don’t know the first thing about stocks
Tax exempt interest from private activity bonds – I don’t know what this is but it’s not English…Private Activity Bonds?
Intangible drilling, circulation, research, experimental or mining costs - This is a for the individual tax payer right? Why would they ask if I have a drilling platform that I can’t touch?
Amortization of pollution-control facilities or depletion – Facilities? Again, is this stuff for the individual tax payer?
Income (or loss) from tax-shelter farm activities or passive activities – I don’t own a farm.
Income from long-term contracts not figured using the percentage-of-completion method – I don’t have a contract with my long-term employer.
Interest paid on a home mortgage NOT used to buy, build or substantially improve your home – Yes I pay interest, but it is less then the personal deductions.
Investment interest expense reported on Form 4952 – Investment, Do they mean the $5.00 I have invested in my savings account?
Net operating loss deduction – What?
Alternative minimum tax adjustments from an estate, trust, electing large partnership or cooperative – I don’t have an estate, trust, partnership (except with my wife), or cooperative – what ever that is.
Section 1202 exclusion – You got me? What is section 1202 and why do I want to exclude it.?
Any general business credit - I have a few hours of comp time.
Qualified electric vehicle credit – Ok now we are getting somewhere I own a Prius.
Nonconventional source fuel credit – I guess the Prius still runs on regular gas so I don’t need this one.
Credit for prior year minimum tax – Again, I don’t know what minimum tax is or if I get credit for it last year.

So now I’m more lost then ever. I guess I have to spend the next twelve months trying to understand all of this stuff and by that time it will be too late.

[CMonster]

Like others have said, you're not stupid - our tax codes are ridiculously complex and bewildering. People who make a living doing taxes don't understand them. The IRS doesn't either.

If I were you I wouldn't change your paycheck deduction, but you could if you're confident the AMT won't affect you. That way you'd have the money sooner rather than later. If I understand it correctly (big IF), you'll have to itemize this year rather than take the standard deduction. The $3150 is deducted from the amount of tax you have to pay - if you usually get $45 back, you'd get $3195 this year. If you were going to owe $4000, you'd only have to pay $850 instead. Assuming, of course, you bought before Sept. 30.

[Cheap!]

<div class='quotetop'>QUOTE(Jeannie @ Oct 31 2006, 10:11 AM) [snapback]341256[/snapback]</div>

The 2006 'benefit' is a tax CREDIT, not a tax DEDUCTION.

If the OP does not have income high enough where AMT kicks in, if he figures out his taxes and, for example, they are $5000, and the only other 'credit' he has is the amount of federal tax that was withheld (for example, $4000), then when he calculates the 'bottom line', it will be $5000 - $4000 credit for tax withheld - $3150 credit for the Prius purchase, so he has an 'overpayment' of $2150, which he may choose to receive as a refund, or to apply to his next year's tax.

I'm NOT a tax accountant, so I don't know anything about AMT. I took an early retirement, and this is the first year that I've worked full time, so I'll have to figure out the AMT thing when I file for 2006, most likely! So I MIGHT get some refund because of the 2006 Prius tax credit, and I might not get any. I'm not spending any anticipated tax refund yet!
[/b]

Ok you are speaking more english than most. What is "OP?"
Ok I guess I am not asking this correctly...
I pay about 5,000 per year in taxes, so do I only have to pay $5,000.00 less the $3,200.00?
That to me would mean I would get back a check for $3,200.00 this year. Is this wrong?

[eagle33199]

I'd say skip past the assistant your doing right now and go straight to the Form 2651 (you'll also have to fill out a 1040 to input into it).

If you select yes on the first page, it says you need to fill out the AMT form (doesn't mean you can't take the credit, you just have to figure out what your minimum is). otherwise, it asks for more information from the 1040.

Also keep in mind that these forms are all from 2005, so things may/probably will be a little bit different. These can probably be used as good estimators of what you'll owe, however when the time comes doing it all proper with your tax software (or person) of choice.

The key is simply the minimum. if you pay 5k in taxes and claim the credit (3150, NOT 3200), you'll either get the full amount back, 3150, or the maximum amount that doesn't put you below AMT. so if your AMT is 4k, you'll only get a refund for 1k.

Also, OP = original poster (ie you!)

[Cheap!]

<div class='quotetop'>QUOTE(CMonster @ Oct 31 2006, 10:19 AM) [snapback]341266[/snapback]</div>

Like others have said, you're not stupid - our tax codes are ridiculously complex and bewildering. People who make a living doing taxes don't understand them. The IRS doesn't either.

If I were you I wouldn't change your paycheck deduction, but you could if you're confident the AMT won't affect you. That way you'd have the money sooner rather than later. If I understand it correctly (big IF), you'll have to itemize this year rather than take the standard deduction. The $3150 is deducted from the amount of tax you have to pay - if you usually get $45 back, you'd get $3195 this year. If you were going to owe $4000, you'd only have to pay $850 instead. Assuming, of course, you bought before Sept. 30.
[/b]

I still don't know what AMT (Alternative Minumum Tax) is or if it affects me. However, I was affraid that they Prius deduction would only be counted against a check due to the IRS in addition to what I had paid all year. From what you are saying here, I don't have to worry because the Prius deduction can be taken atainst what I have been pay in all year.

That is great news for me.
I do know I can't use the 1040 ez this year but I'll just put the standard deductions on the regular EZ form.

Thank you.