Federal Tax Incentive bumped back up to $2000 for 2004, 2005

Re: Federal Tax Incentive bumped back up to $2000 for 2004,

Bill appears to have this right.

There is a link to a Washington Post article which also summarizes the tax bill in the same way, with discussion on the Prius Online forum.

http://www.washingtonpost.com/wp-dyn/artic...-2004Sep25.html

Edit for credit (it was Prius Online's JRjr that broke the story) and to add the link (registration required - read Prius Online for a workaround).

 

Kaching! Kaching! Kaching!

 

Re: Federal Tax Incentive bumped back up to $2000 for 2004,

I'm not finding the article. Is there a link?

Thanks.

 

Re: Federal Tax Incentive bumped back up to $2000 for 2004,

Did the bill ACTUALLY pass? Did it become law already? Does someone have a link to the article in USA Today? Thanks a million for the info!!! If the bill passed, it is superb news to the pocket book.

 

I search usatoday online and found this:

http://www.usatoday.com/printedition/money...mline27.art.htm

Esther

 

Re: Federal Tax Incentive bumped back up to $2000 for 2004,

Near the bottom it says:

Buyers of hybrid electric vehicles in 2004 and 2005 will receive a bigger tax incentive than expected, thanks to the tax cut bill Congress passed Thursday. It restored the alternative-fuel and hybrid vehicle tax deduction to $2,000 for vehicles purchased in 2004 and 2005. The deduction was to have been reduced by 25% this year and by 25% in 2005.

 

This link give more info about the bill in general:

http://www.cbsnews.com/stories/2004/09/23/...ain645130.shtml

 

Re: Federal Tax Incentive bumped back up to $2000 for 2004,

Here is the link to the specific measure that passed:

http://thomas.loc.gov/

Type "hr 1308" in the bill number search box.

Section 318 and 319 relate to the Prius.


----Text follows-----
[align=center:96ef62709d]H.R.1308[/align:96ef62709d]
Working Families Tax Relief Act of 2004 (Enrolled as Agreed to or Passed by Both House and Senate)

--------------------------------------------------------------------------------

SEC. 318. ELIMINATION OF PHASEOUT OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES FOR 2004 AND 2005.

(a) IN GENERAL- Paragraph (2) of section 30(B) is amended to read as follows:

`(2) PHASEOUT- In the case of any qualified electric vehicle placed in service after December 31, 2005, the credit otherwise allowable under subsection (a) (determined after the application of paragraph (1)) shall be reduced by 75 percent.'.

(B) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service after December 31, 2003.

SEC. 319. ELIMINATION OF PHASEOUT FOR DEDUCTION FOR CLEAN-FUEL VEHICLE PROPERTY FOR 2004 AND 2005.

(a) IN GENERAL- Subparagraph (B) of section 179A(B)(1) is amended to read as follows:

`(B) PHASEOUT- In the case of any qualified clean-fuel vehicle property placed in service after December 31, 2005, the limit otherwise allowable under subparagraph (A) shall be reduced by 75 percent.'.

(B) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to property placed in service after December 31, 2003.

-----end text-----


This replaces the Title 26 Internal Revenue Code that had the gradual phase out of the tax credit/deduction.

Section 30:

http://uscode.house.gov/uscode-cgi/fastweb...%20%20%20%20%20

and Section 179A:

http://uscode.house.gov/uscode-cgi/fastweb...%20%20%20%20%20

 

Re: Federal Tax Incentive bumped back up to $2000 for 2004,

According to FuelEconomy.gov

The IRS has determined that consumers purchasing a new Honda Insight, Honda Civic Hybrid or Toyota Prius by the end of 2003 are eligible for a "Clean-Fuel" vehicle tax deduction of up to $2,000. The current incentive is scheduled to phase out in 2004-06. Vehicles purchased in 2004 will be eligible for a deduction of up to $1,500; vehicles purchased in 2005 will be eligible for up to $1,000; vehicles purchased in 2006 will be eligible for up to $500.



Important: Congress is currently considering legislation that may alter the tax incentives for hybrid vehicles. We will provide additional information if the incentives change.

 

That is the reason for my previous post - legislation did pass last Thursday (9/23) it is waiting for the President's signature to be enacted. It is expected to be signed.

But if you read what else is involved with the measure some would think that it quite a price to pay for 500 extra bucks to us individually.

 

What with closing on the new house this week, I'll probably buy tax return software for the first time. I hope all these things are updated correctly...

 

Indeed!!!

 

Please remember this is NOT a tax credit but an adjustment to taxable income. The adjustment reduces AGI and goes on line 33 (on the 2003 1040 form) with the notation of "clean fuel" written in beside it. I'm not sure how well the various tax prep programs handle this situation.

 

Re: Federal Tax Incentive bumped back up to $2000 for 2004,

What is ICE on ICE off?

 

I've used Turbo-tax the past 5-6 years and did notice on last years form the box to check for the clean-fuel or alternative vehicle purchase. Can't remember exactly what it said, but I do remember thinking, well, next year, at this time I'll be checkin' that box!! And now the full $2K will be allowed to be taken off the gross income. I've read somewhere it's about $300 in actual cash. Love my Prius!

PS ICE=internal combustion engine. I imagine ICE on ICE off means shutting off the gas engine when it's not needed (stoplights, EV mode, coasting, etc.)

 

When I read this thread I immediately went and opened my Turbotax 2003 and opened my tax form from last year that I filed.

I went in and found the spot on the form where I entered the deductions and right there in the Turbotx program was the check off for a brand new Prius.

I checked it off and my refund turned into an additional $500 off my taxes.

Now this didn't count obviously since I didn't have my car back then. But it did show that the 2003 turbotax had the question and assuming that my 2004 picture is about the same as my 2003 picture, and there are not other major tax law changes, this gives me an idea what I will get back next year.

YMMV (Your money may vary)

 

Great. That'll pay for a chunk of the high-efficiency washer I'll be getting for the new house, to save money long-term on water. Good for the environment, good for my wallet, good all around...

 

We've bought a front-loading washer about 5 years ago; a very good purchase. Uses less water and much less detergent.

My only complaint is that it was Maytag's first year of this model, and a couple of repairs had to be made. I've heard that they've made significant improvements since then.

 

And if you're lucky your state may also give you a tax credit for that.

Esther