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Tax Deduction Consulting: New Car Deduction Mitchell SD

The credit for a new Hybrid car purchase is based on the type of car purchased and when it was purchased. One of the largest credits is given for the Toyota Prius and the amounts vary from the $3000 credit given there to a low of around $600 for certain other models. Since this is actually a credit and comes directly off the taxes owed, it has much more value than a deduction which only reduces taxable income.

Mr. Todd M. Klein (RFC®), CFP
(605) 348-2433
1241 E St. Joseph St
Rapid City, SD
Company
Fintegra, LLC
Qualifications
Years of Experience: 19
Membership
IARFC
Services
Invoice, Estate Planning, Portfolio Management, Retirement Planning, Tax Planning, Tax Returns, Stocks and Bonds, Mutual Funds, CD Banking, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Education Plan

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H&R Block
(605) 332-8081
4601 E ARROWHEAD PKWY STE 101
SIOUX FALLS, SD

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Liberty Tax Service
(866) 871-1040
633 E Sioux Ave # 6
Pierre, SD

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H&R Block Inside Sears At Rushmore Mall
(605) 399-2114
2200 N MAPLE AVESW Suite 8
RAPID CITY, SD

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Liberty Tax Service
(866) 871-1040
1520 W 12th St
Sioux Falls, SD

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Liberty Tax Service
(866) 871-1040
5216 W 26th St
Sioux Falls, SD

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Liberty Tax Service
(866) 871-1040
532 E Anamosa St
Rapid City, SD

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H&R Block
(605) 362-2567
3400 EMPIRE MALL
SIOUX FALLS, SD

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Liberty Tax Service
(866) 871-1040
1943 Dakota Ave S
Huron, SD

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Determan Ross CPA
(605) 996-1166
1130 S Burr St
Mitchell, SD
 
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Tax Deduction Consulting: New Car Deduction

New Car Tax Deduction

While you do not receive a new car tax deduction, per se, you can receive a major deduction for the sales tax paid and a credit for purchasing certain new cars.

A new car will usually have a high sales price and part of that price will usually be a sales tax. When you are itemizing deductions, you can claim this sales tax as a tax deduction. The claiming of sales tax usually requires a certain amount of record keeping, but it is going to be more than likely that a new car would represent the largest single purchase in any given tax year. Some people have confused the credit given for certain hybrid automobiles as a new car tax deduction, but this needs a bit of clarification.

The credit for a new Hybrid car purchase is based on the type of car purchased and when it was purchased. One of the largest credits is given for the Toyota Prius and the amounts vary from the $3000 credit given there to a low of around $600 for certain other models. Since this is actually a credit and comes directly off the taxes owed, it has much more value than a deduction which only reduces taxable income.

The Federal Government often uses tax credits as a means to encourage certain policies or practices that it considers to be in the public interest. This is the justification for a tax credit on Hybrid cars. The Government is recognizing the environmental concerns as well as the political implications of our dependence on fossil fuels as the major source of power for our automobiles. By encouraging the sale of Hybrids by offering this tax credit, the Government is encouraging the development of other alternative sources of fuel.

One factor that has led some people to question the commitment of the Government to this issue, despite the Hybrid new car tax credit, is the existence of the Alternative Minimum Tax (AMT) which is levied against an increasing number of middle income tax payers. Since a large portion of the people who are buying hybrid cars are ...

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