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How
the Hybrid Car Tax Deduction will (or won't) save you money
By
Stephanie Brightharp
If
you're looking to save money and improve the environment, then
check out hybrid vehicles, which qualify for a tax deduction up
to $2000.
But
don't depend on the sales department at the dealerships to fill
you in, talk to your tax adjuster and refer to Chapter 12 of publication
535 distributed by the IRS, which states the requirements to file
on the 1040 form.
Even though the Internal Revenue Service has announced the clean-vehicle
tax credit, which covers gasoline/electric vehicles, customers
and car salesmen are still unclear about deductions.
You
would think that the tax credit would be another selling point
for the new Honda Civic Hybrid, which has been available in Illinois
for about a month.
But
I spoke with Jeff Harris, a general sales manager in Elgin, and
he wasn't aware of the provision.
So
far sales "seem okay" for the Civic Hybrid, according
to Harris, who received four hybrids and sold two in two weeks.
Mike
James, a salesperson for Honda in Bloomington, had the same reaction
to the news of a tax deduction, but he says it's a plus for the
already appealing vehicle, which gets about 600 miles to a full
tank.
The
IRS had been granting the credits on a case-by-case basis, because
customers who purchased gasoline/electric vehicles began filing
claims that were not covered under the Energy Act of 1992. The
Energy Act only referenced electric vehicles.
The
amount of the deduction may vary depending on where you live and
the price of the hybrid, which also includes Toyota's Prius and
the Honda Insight.
The
clean-vehicle deduction will decrease each year until phased out
completely by 2005.
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