2006 Tax Credit - NOT!

[fish_doc]

But, just as a warning to everyone, you do have to fill out the AMT form 6251 if you're taking the hybrid credit.

--
Keith (who's getting exactly $0 of his $3150 credit from the feds...and who's a bit peeved about it...)

[rflandis]

Anyone else in the same boat?
[/quote]
Same boat but sinking faster. Filing my joint return: AGI = $97,000, with standard deduction taxable income = $70,200, $1,980 in educational tax credits, regular tax = $10,671, Tentative minimum tax = $8,962. Result... Alternative MV Credit is completely lost! SUNK by the AMT torpedo! This was one big chicken that never hatched...sorry I counted on it.

[chinito77]

First post and I do hate it to be a complaint but...

I didn't buy a Prius for tax credit but it was nice to find out about it a few months after my purchase. Little did I know it was going to be such a difficult ordeal. Well, I bought my Prius in June of '06. Looking at the chart available on Toyota's site, I fell into the window for full credit. I looked up some info on it and saw that getting full credit was next to impossible. That's ok as long as I can get something. I don't even think my state has any tax credits for hybrids but it was worth a shot.

I went to do my taxes today at Jackson Hewlett (Tax service agency) in Maryland. I printed out what was available from the Toyota website (Including the new 8910). I gave it to the tax agent and they had never dealt with the issue before so they called someone else to get an answer. At first she put me for something other than the Alternative Motor vehicle Credit savings thing. Well, that got me no kind of credit. I asked to make sure I was being put in for the right thing. I was told that I could not get a Tax Credit on my return because:
A) I do not own a business.
B) I do not use my Prius for business use.
C) I do not owe AMT.

I stopped right there with the prius issue. I wanted to go back home and bring some proof but it's snowing pretty bad here in Maryland. I decided to use this postponement to seek advice from this forum on the issue.

P.S. I don't use TT because the one and only time I did, I owed a ton back. Which means that clearly, accounting is not my thing! :)

[Jeff1971]

The credit is on Turbotax now. I did it ast night and would have qualified for the full credit. I was not aware that this credit cannot be carried over to the next year, and actually have enough deductions that I won't be able to take advantage of the credit at all.

I guess Colorado has a tax credit, so at east there's that. I'm not sure how much it is though. THe 3150 sure sounded nice, but I believe Colorado's is much less.

[JimN]

<div class='quotetop'>QUOTE(chinito77 @ Feb 13 2007, 04:23 PM) [snapback]389724[/snapback]</div>

First post and I do hate it to be a complaint but...

I didn't buy a Prius for tax credit but it was nice to find out about it a few months after my purchase. Little did I know it was going to be such a difficult ordeal. Well, I bought my Prius in June of '06. Looking at the chart available on Toyota's site, I fell into the window for full credit. I looked up some info on it and saw that getting full credit was next to impossible. That's ok as long as I can get something. I don't even think my state has any tax credits for hybrids but it was worth a shot.

I went to do my taxes today at Jackson Hewlett (Tax service agency) in Maryland. I printed out what was available from the Toyota website (Including the new 8910). I gave it to the tax agent and they had never dealt with the issue before so they called someone else to get an answer. At first she put me for something other than the Alternative Motor vehicle Credit savings thing. Well, that got me no kind of credit. I asked to make sure I was being put in for the right thing. I was told that I could not get a Tax Credit on my return because:
A) I do not own a business.
I do not use my Prius for business use.
C) I do not owe AMT.

I stopped right there with the prius issue. I wanted to go back home and bring some proof but it's snowing pretty bad here in Maryland. I decided to use this postponement to seek advice from this forum on the issue.

P.S. I don't use TT because the one and only time I did, I owed a ton back. Which means that clearly, accounting is not my thing!
[/b]

With all due respect two words come to mind when thinking about your JH preparers--Criminally Incompetent. If you haven't paid them, don't go back. If you feel you must go back take the forms and instructions from the sticky thread I started and have them completed. Since I wouldn't trust them as far as I can throw them I would go to www.taxact.com and download their free program. Punch in your numbers and see if you get the same result. IMO walk in tax preparer offices should be held in the same respect as Jiffy Lubes.


Chinito77,

Your situation made me so mad I forgot to welcome you to the site. Welcome to the site. Come for the tax info but stay for the car info.

[curtissac]

<div class='quotetop'>QUOTE(MarinJohn @ Feb 5 2007, 11:33 AM) [snapback]385553[/snapback]</div>

It IS time congress revised AMT. Years ago it was a good idea to make those with lots of deductions and over a certain income pay at least a MINIMUM tax. Unfortunately, AMT has not been indexed, and wages have risen thereby trapping more unsuspecting people in it's trap. IMHO AMT concept is worth keeping, but the tax needs to be overhauled to reflect today's reality. Time to write letters to your congressperson.
[/b]

Don't hold your breath. Restructuring the AMT would be a tax cut for higher incomes. Not a lot of love for that - especially among the party running things now. You'll get politicians to "feel your pain." But they are not going to get off their butts and change it.

[stanleyjohn]

My wife told me yesterday that she heard from our tax accountent and im getting back just over $1500.We are not rich! just average income people.I bought the car in june so was expecting more.Oh well! glad i didnt spend more than i thought i was getting back so far .I should of expected this to happen!this is the US government who is handleing it.

[priusenvious]

<div class='quotetop'>QUOTE(jrlittlejr @ Feb 4 2007, 11:24 PM) [snapback]385442[/snapback]</div>

I'm a long time Prius driver (fun to say that!). I originally owned a 2002. In January of 2006, I looked at the new federal tax credits and realized that I could upgrade to a NEW 2006 Prius, for very little money.

When I bought by 2002 Prius, the feds had a $2000 tax deduction, plus an Oregon tax credit of $1500, which netted me around $2100 off the sticker price. But in 2006, the federal deduction increased to a $3150 tax CREDIT! Add that to the $1500 Oregon tax credit, and the fact that used Prii have held their value so well, and I figured I would be CRAZY not to buy a new Prius. I was essentially getting 3 years of use of my car for virtually nothing! Or so I thought...

What I didn't realize fully was that the federal hybrid tax credit was limited based on the alternative minimum tax! :angry: I read everything that was available online, including the limited info that was on the IRS website BEFORE I bought the car, and thought I had a pretty good handle on things. But I never saw anything about the AMT affecting reducing the hybrid tax credit until I fired up TurboTax and started entering my taxes this year.

Now, don't get me wrong... I'm not rich, but I've done well enough for myself to be able to afford to buy a Prius. And I'm no anti-tax activist... I'm happy to pay my share for the services I get from my government. But it would seem to me that the PURPOSE of this kind of a tax credit would be to get people like me who can afford to be early adopters, to buy a hybrid instead of an SUV!


Absolutely!!!! just learned the same thing the hard way at my accountants office. No complaints, I consider myself lucky to have the problem.....but!!!!
It seems so counter-productive and asinine to encourage a more eco-friendly life, and on the other hand remove any incentive to do so. The word "penalty" for doing well and contributing to the coffers of the US/IRS seems to be to harsh a word, but.............

My total tax bill this year will actually be more than the sticker price for my Prius... so it is kind of frustrating to see that my $3150 "reward" for doing what I firmly believe is the "right thing" is being reduced to virtually nothing.

Sigh... At least the Oregon $1500 credit is NOT reduced in this way!

Anyone else in the same boat?
[/b]

<div class='quotetop'>QUOTE(jrlittlejr @ Feb 4 2007, 11:24 PM) [snapback]385442[/snapback]</div>

I'm a long time Prius driver (fun to say that!). I originally owned a 2002. In January of 2006, I looked at the new federal tax credits and realized that I could upgrade to a NEW 2006 Prius, for very little money.

When I bought by 2002 Prius, the feds had a $2000 tax deduction, plus an Oregon tax credit of $1500, which netted me around $2100 off the sticker price. But in 2006, the federal deduction increased to a $3150 tax CREDIT! Add that to the $1500 Oregon tax credit, and the fact that used Prii have held their value so well, and I figured I would be CRAZY not to buy a new Prius. I was essentially getting 3 years of use of my car for virtually nothing! Or so I thought...

What I didn't realize fully was that the federal hybrid tax credit was limited based on the alternative minimum tax! :angry: I read everything that was available online, including the limited info that was on the IRS website BEFORE I bought the car, and thought I had a pretty good handle on things. But I never saw anything about the AMT affecting reducing the hybrid tax credit until I fired up TurboTax and started entering my taxes this year.


Now, don't get me wrong... I'm not rich, but I've done well enough for myself to be able to afford to buy a Prius. And I'm no anti-tax activist... I'm happy to pay my share for the services I get from my government. But it would seem to me that the PURPOSE of this kind of a tax credit would be to get people like me who can afford to be early adopters, to buy a hybrid instead of an SUV!


My total tax bill this year will actually be more than the sticker price for my Prius... so it is kind of frustrating to see that my $3150 "reward" for doing what I firmly believe is the "right thing" is being reduced to virtually nothing.

Sigh... At least the Oregon $1500 credit is NOT reduced in this way!

Anyone else in the same boat?
[/b]

Absolutely!!!! just learned the same thing the hard way at my accountants office. No complaints, I consider myself lucky to have the problem.....but!!!!
It seems so counter-productive and asinine to encourage a more eco-friendly life, and on the other hand remove any incentive to do so. The word "penalty" for doing well and contributing to the coffers of the US/IRS seems to be to harsh a word, but.............

[chinito77]

Well, I went back to my local Tax Service place and after much arguing, another lady was able to help me. The original person kept insisting that I get nothing because my vehicle wasn't placed in "service" as per 8910 which applies to only those who own a business. Well, I got lucky that someone else helped me out this time. They did the 8910 for me and behold... there was credit!

Now, someone help me out here please. The credit is so pathetic that I don't think it was added up right. So here are highlights from my 8910 as follows:

1) Year, make, model = 2006, Toyota, Prius
2) Enter date vehicle was placed in service = 6/3/06
3) Maximum credit allowed = $3,150
4) Phaseout percent = 100%
5) Tentative credit = 3,150
6) Business use percent = 0%
7) Multiply line 5 by line 6 = 0

11) Subtract line 7 from line 5 = 3,150
12) Add columns A through c on line 11 = 3,150
13) Regular tax before credit = 1,761
14b) Credits from form 1040, lines 48 through 54 = 1,520
14d) Add lines 14a through 14c = 1520
15) Net regular tax = 241
16) Tentative minimum tax = 0
17) Subtract line 16 from 15 = 241
18) Personal use part of credit = 241

So there is my whopping Hybrid tax credit for someone filing Married Jointly with 2 exemptions with 4 W-2's. Questions or comments?

[JimN]

<div class='quotetop'>QUOTE(chinito77 @ Feb 20 2007, 06:20 PM) [snapback]393572[/snapback]</div>

Well, I went back to my local Tax Service place and after much arguing, another lady was able to help me. The original person kept insisting that I get nothing because my vehicle wasn't placed in "service" as per 8910 which applies to only those who own a business. Well, I got lucky that someone else helped me out this time. They did the 8910 for me and behold... there was credit!

Now, someone help me out here please. The credit is so pathetic that I don't think it was added up right. So here are highlights from my 8910 as follows:

1) Year, make, model = 2006, Toyota, Prius
2) Enter date vehicle was placed in service = 6/3/06
3) Maximum credit allowed = $3,150
4) Phaseout percent = 100%
5) Tentative credit = 3,150
6) Business use percent = 0%
7) Multiply line 5 by line 6 = 0

11) Subtract line 7 from line 5 = 3,150
12) Add columns A through c on line 11 = 3,150
13) Regular tax before credit = 1,761
14b) Credits from form 1040, lines 48 through 54 = 1,520
14d) Add lines 14a through 14c = 1520
15) Net regular tax = 241
16) Tentative minimum tax = 0
17) Subtract line 16 from 15 = 241
18) Personal use part of credit = 241

So there is my whopping Hybrid tax credit for someone filing Married Jointly with 2 exemptions with 4 W-2's. Questions or comments?
[/b]

Since the hybrid credit can not be carried forward it can only reduce your tax to $0. With no other credits it would take a taxable income (line 43) of $26050 to use the entire hybrid credit. I hope you enjoy the car for many years and that you didn't get in over your head.