Worried about the Tax credit/ATM

First of all it is AMT (Alternative Minimum Tax) not ATM. It has been extensively discussed here in the recent past.

H & R Block has an online estimator: Alternative Minimum Tax (AMT) Estimator

 

I'm not sure what your level of paying a lot to Uncle Sam refers to (a lot is relative), but if it is really a large amount, then the tax credit really won't make a difference. Or at least if it does help you, it won't be very significant.

We pay a lot in taxes, and for us it was irrelevant whether we took the Prius after Jan 1 or not. The credit/deduction really didn't make any difference.

 

"No AMT Tax" doesnt mean you will get the full credit. Take a look of your estimated tax liability and AMT amount from above link. If your regular tax subtract AMT is greater than hybrid credit, then you should be able to get full credit. otherwise you will get smaller credit, or none.

If you make so much money and is about to pay AMT, ask your tax adviser and see if he/she has some legal ways to reduce your income level.

 

Let us know what she says. I suspect you're self employed because you're paying quarterly taxes, and are paying more than you'd like to pay in that system. If you pay $3150 MORE than the AMT level for you, then the credit will roll back your taxes by that $3150.

BTW - I actually liked the Prius better than the Camry. I found the seats in the Camry less comfortable, and the room in the cabin just about equal, with the Prius just slightly smaller in feel. I don't really like the seating comfort in any of the Toyotas over the past few years ... the only other small car that I thought was OK was the Corrolla Matrix, but its so noisy inside.

 

do you have anything from the accountant from last year? the software my dad uses prints out a summary sheet. there it will say how much AMT you paid, if any. however, i'm not sure if it would tell you what your AMT was if you didnt pay any last year.

as others have pointed out, the credit can not decrease your tax liability below your AMT. if the spread between your AMT and what you actually pay is more than the $3150, then you will get the full amount of the credit.

Dec 29th is a little late to have found out about this. for me, since i almost always pay AMT, i had to rush to try to find a prius before the end of the year. i put an order in in mid/late november and i picked one up yesterday... and it was a customer cancel.

having said all that, there are a lot of people who don't pay AMT that are cancelling their orders for 2006 because they just found out about the tax credit. so you may be able to find one before the end of the year, if it turns out you pay AMT. for instance, i was getting worried that dealer #1 was not going to come through for me, so i contacted another dealer, and a day later he had the exact car that i wanted ready for me. coincidentally that same day dealer #1 had the cancellation and so i went with them. this is in the SF bay area, where the prius is very hot (i swear every other car i see is a prius!)