Weird Tax Credit Questions

In years prior to having bought the 2006 prius, you were probably getting some tax deduction on those older purchases. (not a tax credit)

Those transactions would be independent of the 2006 purchase. Unless the AMT zaps you, you'll probably get the credit when you do your taxes in the spring.

 

Yes, previous years it was a deduction, not a credit. With the new law in '06, it turned into a credit. If your car was purchased before the first of this month, then you are eligible for the credit, baring problems associated with AMT.

 

Yes, if you got the car on the 29th it has the full tax credit of $3150.

AMT stands for alternative minimum tax, and is essentially a way for the government to ensure that people aren't taking so many credits and deductions so as to not have to pay taxes. You would need to discuss the situation with a tax guy to be sure that you won't be hit with AMT.

 

if you sold your 05 you may be subject to recapture of your tax deduction from 2005. if you took it, that is

since your 04 was lost in an accident, you're not subject to recapture for that one.

and you will be eligible for the 2006 tax credit.

 

<_< Quote: " If your car was purchased before the first of this month, then you are eligible for the credit..."

Additional comment: If your new Prius is delivered after September 30th, you are eligible for a Tax Credit of $1,575 (half the original amount). So, you haven't LOST the Tax Credit - you still get a nice credit. As I recall, this remains valid through the end of March, 2008 after which a new purchaser would get $787.50 for another six months. Under current regulations, after that the tax credit phases out.

 

<div class='quotetop'>QUOTE(Tlyke1983 @ Oct 14 2006, 04:06 PM) [snapback]332809[/snapback]</div>

I had some tax problems a year ago, and I actually found working with the IRS much more pleasant than I thought it would be. The people on the phone were pleasant and informative (although there were often long waiting times to get through to the general tax phone number), and the people I dealt with where I had a specific phone number to discuss my problem were prompt in getting back to me if I had to leave a message. My problem wound up getting referred to the Tax Advocate because some forms I had submitted got lost in an IRS office, and I got the first of a series of refunds in about six weeks.

 

<div class='quotetop'>QUOTE(Jeannie @ Oct 15 2006, 08:55 AM) [snapback]332957[/snapback]</div>

Ditto. I had some problems a few years ago because my W-2 from my defunct dotcom employer showed a much higher income than my paystubs showed (turned out it was because they were witholding taxes but not sending the money to the IRS). Anyway, they were extremely nice and helpful.