Well, what is a hybrid car? A car that qualifies to beat all the
pollution and treat nature as its friend. The government is also
its friend. Get a relief for that car too.
The hybrid car tax deduction enables owners of a hybrid vehicle
- that is cars that have a gasoline-powered engine and an
electric motor -- it's a one time deal under the Families Tax
relief act.
Cars bought between 2004 and 2005 can have the relief up to
$2000 and $500 for cars to be bought in 2006.
Fortunately, a revised energy bill that was signed in August
2005, gives hybrid cars even more lucrative incentives. Due to
this, a full dollar tax credit comes into play, much to the
respite of the tax payers. They should now postpone the purchase
of their hybrid vehicle to 2006, and avail the tax credits. They
are however restricted to only the first 60000 owners and so you
now need to run to your dealer to be among the first ones.
Under the existing law, the value of the tax break depends on
the tax bracket you fall into because it is a tax deduction.
Those who have purchased hybrid vehicles in 2004 and 2005 can
clam a $2000 reduction on their 2004 or 2005 tax returns. This
deduction will give you a relief of $600 if you are in the 33%
bracket but $300 if you are in the 15% bracket.
Vehicles prior to 2004 can also claim a relief but has to do so
within the two years from filing of tax or three years from
initial return date.
Claiming your tax deduction is relatively simple; you do not
have to itemize the deduction in order to claim it, but you must
use Form 1040. Your deduction should be documented underneath
the form and be classified as 'Clean Fuel'.
See, your hybrid car not only saves the environment but puts a
few dollars in your pocket too. What more can you ask from your
high-brid car...
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