Did You Know that You can Get Tax Credits for Buying a Toyota Prius? by:Dinh Tran
The Toyota Prius is the vehicle that started the entire hybrid automobile craze. It continues to reign supreme over the market and the IRS has narrated the tax credits for this year.
IRS Announces tax subsidies For Toyota Prius
In an effort to plug energy efficiency, the executive has instituted an energy program that provides monetary rewards for energy efficient products. The government realizes poking us with words is not going to work. As such, it has made a decision to issue tax breaks to incentivize us to conform our activities to the required goal. In this case, reducing our oil dependency is the key.
The Toyota Prius was the first mass production hybrid car. It was such a hit that Toyota could not come close to filling orders the initial few years. This remains the case to some degree, a reflection of our rising environmental consciousness and high gas costs. The tax credit you get with a purchase provides another excuse to buy this peppy tiny car.
The IRS issues tax break amounts for hybrid autos that meet its standards. Assorted manufactures have been authorized including Ford, Lexus, Honda, Mercury and, naturally, Toyota. In this situation, the tax subsidy is $3,150. You have to purchase the car new from a dealer to qualify for the credit and the earlier, the better. The tax subsidy is graduated, which means it becomes reduced as more vehicles are sold thru the year. The full credit is only available through the quarter of the economic calendar of the year after which Toyota sells the sixty thousand vehicle. If you buy in the following two financial quarters, you can only claim twelve the tax subsidy. The successive 2 quarters see a reduction to twenty-five % of the tax allowance. After that, you can't claim any of the credit.
It is crucial to grasp the difference between a tax credit and a tax deduction. A tax reduction is taken from your changed gross revenue, which helps a bit. A tax credit is a dollar for greenback reduction of the amount of tax you owe. In this case, the tax credit could be used to reduce a ten thousand tax liability by $3,150 to $6,850. That is a large savings any way you cut it.
Obviously, hybrid cars are hot sellers and make sense on a large amount of fronts given outrageous gas costs. The tax subsidies that come with each acquisition definitely adds to their popularity.
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