IRS Hybrid Car Tax Credit, Get a Credit for Your Hybrid Car
No matter what the reason you may have bought a hybrid car, you are probably anxious to know how much of a deduction you can get on your tax return for this environmentally friendly purchase.
Some people have discovered that they will be subject to a tax called the Alternative Minimum Tax which means they cannot claim the hybrid car deduction. What is the Alternative Minimum Tax?
The Alternative Minimum tax is a tax that falls on the shoulders of high income individuals who end up not owing a large amount at the end of the year. If you fall in to this high income bracket you may not be able to take full advantage of the credit offered by purchasing a hybrid car.
To find out if you will have to pay the Alternative Minimum Tax there are a couple of things you need to do. The first thing you will need to do is figure your taxes using the regular guidelines. Secondly you must figure your taxes using the special guidelines of the Alternative Minimum Tax. You now must pay whichever bill is higher.
Depending on the figures that you come up with and the amount of the difference between the two you will be able to see how much of a deduction you will get if at all. So if you are planning on making a hybrid car purchase to receive this deduction of up to $3,000.00 you may first want to figure your taxes to see if this would be the best economical choice for you.
If you are currently high income and have recently purchased a hybrid vehicle we recommend using one of the free tax calculatorʼs available at TurboTax online. TurboTax online offers a variety of helpful tools and online support to answer all of your tax questions and concerns.
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