as the tax credit for toyota hybrids is long gone, are there other ways to get some other tax benefit from a new prius purchased in 2008? i work as a rural carrier and use my vehicle for mail delivery with the usps. can my purchase be used as a business expense tax deduction? has anyone tried and/or succeeded in this? since i borrowed a good chunk of the cost from my brother, there's no official interest i can deduct. i believe i've seen on the 2008 1040 that one can deduct state and local taxes on new car purchases. (i also thought i saw something about special deductions for those who use/purchase alternative-fuel vehicles for use in one's work.) i'll be doing some research on my own into these questions, but would appreciate hearing what any of you know. thanks
The Prius is not an alternative fuel vehicle--it burns gasoline. The purchase price of the Prius can not be deducted as an expense. I presume you are talking about business use of a personal automobile. The portion of the Prius used for business can be expensed at the rate of $0.505 per mile of business use. Keep detailed mileage records and check the rate as it does change. The rate(s) in effect each year should be printed on the tax form.
