How to Get a Tax Break on My Priusby Art Corvelay
In an effort to encourage environmental responsibility, the U.S. federal government began issuing tax credits for those who purchased hybrid cars. The hybrid car tax credit differs from car to car. For example, for the Toyota Prius, the tax credit began in the 2006 tax year and ended in October 2007. If you purchased any 2005 through 2008 Toyota Prius model, you may be eligible for the credit. Because the Prius credit ended in 2007, you'll need to amend your taxes from a previous year to receive the credit.
Determine whether your car purchase is eligible for the tax credit. To be eligible, the taxpayer must have acquired the car for use and not for resale. Also, the vehicle must be used primarily in the United States. Finally, you must have purchased the Prius on or before Sept. 30, 2007.
Find out how much you are allowed to claim. If you purchased any 2005 to 2008 Prius between Jan. 1, 2006, and Sept. 30, 2006, you are eligible to receive $3,150. If you purchased the vehicle between Oct. 1, 2006, and March 31, 2007, you are entitled to $1,575. If you purchased between April 1, 2007, and Sept. 30, 2007, you are entitled to $787.50.
Complete Internal Revenue Service Form 8910. You are asked to write down the make and model, the date the vehicle was placed in service (purchased), the maximum credit allowed, phaseout percentage and total credit.
Fill out the 1040X tax form. This form is used to amend taxes from a previous year. Because the Prius tax credit ended in 2007, you'll need to amend the tax return for the year when you purchased the car. You can amend a return up to three years after the initial filing due date. Enter the amount of the credit on the form.
File the 1040X and attach the 8910 form. You will receive a refund once your 1040X is processed.
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