$1575.00 Tax Credit question?

[Prius07Pkg4]

My friend and I each bought a Prius on Nov 06. He went to Tax consultant and did his 2006 income tax; he told me he's only get under $1100.00. I asked him why under $1100.00, he told me his tax consultant said it's because he made good wages in 2006.

Is it right? If it's right then should it be "tax credit up to $1575.00 depends on the income".

Thanks.

[CMonster]

That could be right. If he made good wages he might be subject to the Alternative Minimum Tax (AMT), which can decrease or eliminate the rebate. The other possibility is that he didn't pay more than $1100 in taxes last year. He only gets back what he put in. There are lots of other threads about the details on this forum.

[JimN]

<div class='quotetop'>QUOTE(Prius07Pkg4 @ Feb 28 2007, 11:49 PM) [snapback]398273[/snapback]</div>

My friend and I each bought a Prius on Nov 06. He went to Tax consultant and did his 2006 income tax; he told me he's only get under $1100.00. I asked him why under $1100.00, he told me his tax consultant said it's because he made good wages in 2006.

Is it right? If it's right then should it be "tax credit up to $1575.00 depends on the income".

Thanks.
[/b]

Sounds like either you're not getting a whole story or your friend got a lame answer. Your friend is paying for a service so should have received a more detailed answer. The consultant should also have tried to manipulate the numbers to minimize the tax liability.

Some possible reasons:

Income subject to AMT

Credits on lines 47-55

Taxable income (line 43) under $9850

Go to taxact.com and download their program for free. Using their program I was also able to file the Federal 1040 electronically for free.