I have been working on my income tax tonight. I am having a little trouble filling out the form to get the tax credit for my 2005 prius. I bought it in June of 2005. Has anyone in this forum filled out form 8834?It seems pretty complicated to me. Does anybody know the amount I can deduct. I paid $25494.50, am I correct in assuming that I can deduct $2549.45. I do not understand expense deduction line 3. What does line 18 mean Tentitative minimum tax?
there's no form, and it doesn't go on the itemized deductions. on the 1040, write on the total deductions line "clean fuel" and add $2000 to your total deductions. it comes right off your AGI. http://www.irs.gov/newsroom/article/0,,id=104549,00.html
the prius is not an electric vehicle. it is a clean fuel vehicle. form 8834 does not apply. i'm telling you. there is no form. i did my taxes 2 weeks ago. there is a $2000 deduction. flat off your AGI.
if you don't believe me, look at the big exclamation point in the form 8834 instructions. "Gasoline/electric hybrid vehicles that are not powered primarily by an electric motor are not qualified electric vehicles. These hybrid vehicles include the Ford Escape Hybrid, Honda Accord Hybrid, Honda Insight, Honda Civic Hybrid, Lexus RX 400h, Mercury Mariner Hybrid, Toyota Highlander Hybrid, and Toyota Prius."
Yes, that's true it does say not the Prius etc. But every year they allow it for the Prius because it fits all the definitions of a electric vehicle. It's a Full Hybrid.
The instuctions say the Prius does not qualify for the Electric Vehicle credit. Are you claiming it anyway or am I misunderstanding you? If you claimed it for the Prius, expect a letter from the IRS in about a year or 2 asking for additonal taxes plus interest and penalities. It takes the IRS that long to "audit" your return. Just because you received your refund and didn't get a letter withing a month or two after filing doesn't mean the IRS has accepted your claiming the credit. If you filed and claimed the credit, I suggest that you amend your return ASAP. Those penalities and interest charges can be substantial if you delay.
By the way, that's the second major disagreement I've had with Turbo Tax this year. The other one involved Education Credits.
Anyone had any luck with TurboTax and getting this right? I have sent 5 emails and called and TurboTax claims the IRS is wrong and the deduction should be on Schedule A
The IRS is wrong?! Wow. It takes some cajones for Turbo Tax to say that. I mean, I can understand a single person at the IRS being mistaken, but there are published documents that specifically address the Prius. Take a look at galaxee's posts further up this thread. And, once again, for the purposes of the IRS, the Prius is NOT considered an electric vehicle. It's a "clean fuel" vehicle.
I entered the deduction using TurboTax basic. I assume the other versions work the same. Try this: Open your form 1040 and go to line 36. Immediately above is a worksheet. Enter $2000 on line H "deduction for clean-fuel vehicles". TurboTax will then insert the necessary data for your deduction on line 36 of the 1040. IRS PUB 535 says to insert the info on line 35 which turboTax inserts on line 36. Since line 36 is a sum including line 35 it looks like the same thing to me. See page 46 of PUB 535 for the IRS text. edit: For those NOT using turboTax, add "clean-air" on the dotted line and "$2000" on line 35 and then total on line 36. This is per the instructions in the above reference.
I used Turbo Tax and it was in there; no extra forms, etc. Figured it automatically. It even listed the 2005 Toyota Prius, Honda Civic, etc. You have to be careful which form you use; it's not the "Electric Vehicle Credit" form; go further into the program and you'll find the correct one - IT'S THERE!
