3 Ways to Enter '03/'04 Prius Clean Fuel Vehicl Deduction

[RobertO]

First, allow me to credit my wife, Judy; no way am I that smart.

She, on the other hand, has been doing taxes for the extended family for more than 20 years. She's already done our taxes and filed electronically - including the "Prius Credit".

She explains below three ways to enter the deduction, as follows:


1. If you are doing a 1040 enter it on Line 33. Write in, "Clean-fuel Vehicle Deduction" and enter the amount, $ 2,000.00. Then add that amount to "Total of Lines 23 to 33".

You're done.


2. OR; on the 1040, Page 2, go to "Other
Adjustments to Income, Smart Work Sheet", Line I . Enter the deduction for Clean Fuel Vehicle there.

You're done.


3. OR; Using Turbo Tax, if you chose the "Easy Step Interview" method, in the "Deductions" segment, it will ask you, "Did you Lease or Purchase an Electric Vehicle?" You should answer, "No".

Then, it will ask, "Do you qualify for a CLEAN FUEL VEHICLE DEDUCTION?". Answer, "Yes".

You will see a Selection box for your car; select, "New Toyota Prius".

You will get a response screen, stating, "You qualify for a Clean Fuel Vehicle deduction of $ 2,000.00. We will deduct this from your total income."

You're done.

DISCLAIMER:

We ain't accountants, nor are we tax experts. We're not sitting on a fortune in stock, bonds and a summer cottage in New Zealand. The foregoing information is based on what happened when we personally
filed using Turbo Tax 2003, and 20+ years of experience preparing and filing tax forms.

Now go get that deduction!


Bob & Judy

[rockluvr]

Thanks, Judy (and Bob) for the tax tips. I am going to use TurboTax and didn't even think about it until the TaxCut question came up that the computer program might not deal with this situation. Looking forward to taking this deduction. :wink:

[naterprius]

rockluvr, don't forget about your FAT State tax Credit!

http://www.revenue.state.co.us/fyi/pdf/income09.pdf

I'm currently investigating whether or net we can use our own numbers here in Colorado (compared against the Corolla). At the very least, you'll get $2678 in CASH!

Nate

[04preius]

Thank you, Mrs. RobertO!

But I need verification on this. My taxman told me today that I was eligible for a federal tax CREDIT of 10% of the vehicle cost, since it's an electric vehicle. That alone gives me a refund of $2430. I was expecting the $2000 federal tax DEDUCTION noted in this thread subject, which by itself makes my refund more like $500.

Before I bear false witness against the IRS, can anyone verify this? Thank you again.

[richard schumacher]

Are you maybe thinking of a state tax credit? Here's one reference stating clearly that there is a Federal tax deduction, not a credit:

http://www.fueleconomy.gov/feg/tax_hybrid.shtml

Note that the deduction can be claimed only by the original purchaser, and that it varies according to the year that the car was put into service, not by model year of the car.

[egs]

But I need verification on this. My taxman told me today that I was eligible for a federal tax CREDIT of 10% of the vehicle cost, since it's an electric vehicle.

From everything that I have read, hybrid vehicles don't qualify for the electric tax CREDIT. It's only the tax DEDUCTION (2003: $2000, 2004: $1500, etc.) at the Federal level...

[rockluvr]

Naterprius,
Yes, I took the Colorado tax credit and the federal tax deduction of $2000.

04preius wrote:

But I need verification on this. My taxman told me today that I was eligible for a federal tax CREDIT of 10% of the vehicle cost, since it's an electric vehicle.


From everything that I have read, hybrid vehicles don't qualify for the electric tax CREDIT. It's only the tax DEDUCTION (2003: $2000, 2004: $1500, etc.) at the Federal level...

Prius does not qualify as an electric vehicle. Sorry, your taxman is incorrect. However, if he/she will take responsibility to ensure your tax liability is correct - hey, why not?