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2006 Tax Credit- Phaseout at Income Levels?

Discussion in 'Gen 2 Prius Main Forum' started by vnbatra, Nov 10, 2005.

  1. vnbatra

    vnbatra New Member

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    Hello,
    We just placed our name on the waiting for a 2006 Prius Package #8 at several dealers in the san francisco bay area. One dealer mentioned that the tax credit for the prius in 2006 phases out at a certain income level. Of course, he didn't know the income level but thought it was $1,000,000 which I am nowhere near. I checked with my accountant and she said that the only phaseout occured at 60,000 Units sold. If the credit phases out at a certain level then we may take the car in 2005 rather than wait till January. If anyone has any further info about the tax credit that would be greatly appreciated. Thanks, Nick
     
    #1 vnbatra, Nov 10, 2005
  2. RonM

    RonM New Member

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    He's probably talking about the fact that with AMT you are better off with this year's tax deduction, and not next year's credit. AMT is very complex, but if you live in California, with a higher state income tax rate, you are more likely to pay it, especially if you own a house. About 20+% of Americans are supposed to be paying AMT rather than regular income tax, aapparently, and the number is increasing. And all this for something that was originally instituted because a 100 or so really rich people managed to avoid all income tax 40-50 years ago.

    You can't really say where AMT will kick in -- it will differ for everyone. It all depends on your deductions, income, etc. I have read that families with many kids are much more likely to be hit with it. Writing off deductions for mortgage and real estate taxes (especially in high-priced California), or areas with high state income tax (like California or New York) make you more susceptible. No one income level guarantees you one way or the other.

    There was much discussion about how AMT payers don't get to take advantage of the credit. You can search for it, but it may have been lost when there were problems with PC 3-4 weeks ago.
     
    #2 RonM, Nov 10, 2005
  3. vnbatra

    vnbatra New Member

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    Thanks for the reply. You could be right that he may be referring to the AMT. However, I do know that many credits do phase out at certain levels. For example, we had a baby last year and were unable to take the $500 child tax credit as it is phased out over I think $250,000.
     
    #3 vnbatra, Nov 10, 2005
  4. Kiloran

    Kiloran New Member

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    I put this in the FAQ today:
    http://en.wikibooks.org/wiki/Toyota_Prius_...brid_tax_credit
     
    #4 Kiloran, Nov 10, 2005
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