My rebate is worthless

JoeyJoeJoShabadoo Jr · 02-02-2008, 01:37 PM

So after getting my taxes done, I found out that I won't be recieving my $787.50 credit. I graduated in May and started working in July. Since then, I've paid off a bunch of interest from my student loans. Because I paid off more in student loans than I paid in federal taxes, i'm recieving all my federal taxes back(no complaint there). But that leaves no room for my Prius credit to take affect and thus I won't be getting anything for it. How much of a load of crap is that?

I'm thinking of writing a letter to the IRs explaining it. The way the system is setup it doesn't make it beneficial for young, recent college grads to buy a hybrid. If you don't make enough money to recieve the credit your SOL.

galaxee · 02-02-2008, 01:48 PM

you mean it doesn't make it beneficial for *anyone* who doesn't make a certain amount of money to buy a hybrid.

-people who don't make enough lose out
-people who make too much lose out to AMT

like most things, it applies to everyone but most are excluded.

damn that's a lot of student loan interest though. the student loan interest deduction would have to equal your income to completely knock out your tax. unless you've still got education credits to claim too.

Godiva · 02-02-2008, 03:07 PM

So, you wanted to get back more money than you paid in?

Why?

qbee42 · 02-02-2008, 04:12 PM

It's a tax credit. That's the way they work, with only a few narrow exceptions, such as the Earned Income Credit for low income wage earners. You knew this when you purchased your Prius, or you should have known it. It's not like the rules were changed in the middle of the game.

Tom

IsrAmeriPrius · 02-02-2008, 05:05 PM

Quote:

Originally Posted by joesolo

I'm thinking of writing a letter to the IRs explaining it.

The IRS does not make the law; it only enforces what congress passed and the president signed.

Slartibartfast · 02-02-2008, 06:23 PM

Quote:

Originally Posted by galaxee

you mean it doesn't make it beneficial for *anyone* who doesn't make a certain amount of money to buy a hybrid.

-people who don't make enough lose out
-people who make too much lose out to AMT

like most things, it applies to everyone but most are excluded.

damn that's a lot of student loan interest though. the student loan interest deduction would have to equal your income to completely knock out your tax. unless you've still got education credits to claim too.

Not quite, though. You still have standard deductions and personal deductions (if independent), which add up to about $8000 per person if single. With the SL deduction, education credit, and an entry level job after graduation or during a summer, it's entirely possible to have zero federal liability before touching the hybrid credit.

We hit the AMT ceiling on our 2006 taxes with the Prius credit. We qualified for $3150 but then couldn't find enough above the line, non-AMT deductions to make it work. Just taking the education, child, and student loan benefits was enough to knock off half the credit. I still think it was Congress/W's plan to screw all the vegan, latte-drinking, DFH Californians and New Yorkers who ran out to trade in their VW Microbuses and get their fruity newfangled cars and were too busy smoking pot to do their taxes a year ahead of time. But I'm not bitter.

RobH · 02-03-2008, 01:08 AM

Since I'm retired, the problem I had with the credit was that I didn't have enough taxes due to utilize the full credit. The solution was to convert enough standard IRA money into a Roth IRA. That made taxes due on the IRA, and I calculated it as just enough to use up the Prius credit.

Roth is a really good deal if you can use it. You pay taxes on the money when you create the Roth, but thereafter all money earned in the Roth is tax free. If you just move enough to not quite reach the point where you actually owe taxes on it, then you've insulated the money from ever being taxed. One of the rules about a Roth is that you have to create it by the end of the tax year. That means the end of December, NOT April 15. So if you haven't nailed down all the numbers by the end of December, then you don't know exactly how much to convert to a Roth. Never fear, you just overcontribute to the Roth, and then recharacterize (undo) the overshoot when you've got it all figured out (April 15 or whenever you actually file).

patsparks · 02-03-2008, 06:31 AM

You got a great car and you will continue to get great mileage. You pay less tax on the fuel you get for the Prius, what is wrong with that?

I wish I had such a problem, the government paid back all my tax and they won't give me back any more, that's tough.

Doc Willie · 02-03-2008, 07:39 AM

Quote:

Originally Posted by galaxee

you mean it doesn't make it beneficial for *anyone* who doesn't make a certain amount of money to buy a hybrid.

-people who don't make enough lose out
-people who make too much lose out to AMT

like most things, it applies to everyone but most are excluded.

Scrood again. I have been paying AMT for the previous 2 years already.

galaxee · 02-03-2008, 11:19 AM

Quote:

Originally Posted by Slartibartfast

Not quite, though. You still have standard deductions and personal deductions (if independent), which add up to about $8000 per person if single.

yep, you got me. should have specified "taxable income"

02-02-2008, 01:37 PM	#1
JoeyJoeJoShabadoo Jr Member Join Date: Sep 2007 Location: New Jersey Posts: 47 My Car: 2008 Prius Model: Package: #6 Thanks: 0 Thanked 0 Times in 0 Posts Friends: 0	My rebate is worthless So after getting my taxes done, I found out that I won't be recieving my $787.50 credit. I graduated in May and started working in July. Since then, I've paid off a bunch of interest from my student loans. Because I paid off more in student loans than I paid in federal taxes, i'm recieving all my federal taxes back(no complaint there). But that leaves no room for my Prius credit to take affect and thus I won't be getting anything for it. How much of a load of crap is that? I'm thinking of writing a letter to the IRs explaining it. The way the system is setup it doesn't make it beneficial for young, recent college grads to buy a hybrid. If you don't make enough money to recieve the credit your SOL. __________________ 2008 Barcelona Red Package #6 Modifications Engine Block Heater Grill Blocking with Armacell Insulation Scangauge II Side Moldings White LED Interior Lighting OEM All-Weather Mats Chrome License Plate Frames Fumoto Drain Valve Trimless Rims

02-02-2008, 01:48 PM	#2
galaxee resident lab rat Join Date: Mar 2005 Location: boilermaker territory Posts: 9,675 My Car: 2005 Prius Model: N/A Package: #5 Thanks: 0 Thanked 94 Times in 37 Posts Friends: 26	Re: My rebate is worthless you mean it doesn't make it beneficial for anyone who doesn't make a certain amount of money to buy a hybrid. -people who don't make enough lose out -people who make too much lose out to AMT like most things, it applies to everyone but most are excluded. damn that's a lot of student loan interest though. the student loan interest deduction would have to equal your income to completely knock out your tax. unless you've still got education credits to claim too.

02-02-2008, 03:07 PM	#3
Godiva AmeriKan Citizen Join Date: Apr 2005 Location: San Diego, CA Posts: 10,342 My Car: 2005 Prius Model: Package: #1 Thanks: 0 Thanked 1 Time in 1 Post Friends: 7	Re: My rebate is worthless So, you wanted to get back more money than you paid in? Why?

02-02-2008, 04:12 PM	#4
qbee42 Senior Member Join Date: Mar 2006 Location: Northern Michigan Posts: 10,474 My Car: 2006 Prius Model: Package: #7 Thanks: 94 Thanked 387 Times in 289 Posts Friends: 10	Re: My rebate is worthless It's a tax credit. That's the way they work, with only a few narrow exceptions, such as the Earned Income Credit for low income wage earners. You knew this when you purchased your Prius, or you should have known it. It's not like the rules were changed in the middle of the game. Tom

02-03-2008, 01:08 AM	#7
RobH Senior Member Join Date: Sep 2006 Location: Sunnyvale, California Posts: 674 My Car: 2006 Prius Model: Package: #8 Thanks: 23 Thanked 46 Times in 29 Posts Friends: 0	Re: My rebate is worthless Since I'm retired, the problem I had with the credit was that I didn't have enough taxes due to utilize the full credit. The solution was to convert enough standard IRA money into a Roth IRA. That made taxes due on the IRA, and I calculated it as just enough to use up the Prius credit. Roth is a really good deal if you can use it. You pay taxes on the money when you create the Roth, but thereafter all money earned in the Roth is tax free. If you just move enough to not quite reach the point where you actually owe taxes on it, then you've insulated the money from ever being taxed. One of the rules about a Roth is that you have to create it by the end of the tax year. That means the end of December, NOT April 15. So if you haven't nailed down all the numbers by the end of December, then you don't know exactly how much to convert to a Roth. Never fear, you just overcontribute to the Roth, and then recharacterize (undo) the overshoot when you've got it all figured out (April 15 or whenever you actually file).

02-03-2008, 06:31 AM	#8
patsparks An Aussie perspective Join Date: Jul 2007 Location: Adelaide South Australia Posts: 9,222 My Car: 2004 Prius Model: N/A Package: Base Thanks: 124 Thanked 180 Times in 138 Posts Friends: 33	Re: My rebate is worthless You got a great car and you will continue to get great mileage. You pay less tax on the fuel you get for the Prius, what is wrong with that? I wish I had such a problem, the government paid back all my tax and they won't give me back any more, that's tough.