Hybrid Cars Tax Credits

For questions, email Chuck Plake, E.A. at Plake Tax Service cplake@plakenet.com.

Published by Soul.com
Tax credits and deductions for hybrid vehicles
Updated: April 16, 2009

The new clean vehicle tax credit called for a tax credit of between $500 and $3400, depending on the vehicle, but the credit was be capped at 60,000 vehicles per manufacturer.

Thus, tax credits for many hybrid cars have already expired, or are close to expiring. For instance, all Toyota and Lexus hybrid vehicles no longer qualify for any tax credits. The Honda Civic hybrid only qualifies for one quarter if the original credit, but Honda's credit will expire at the end of December of 2008.

Chevy Malibu Hybrid = $1,300.00
Chevy Tahoe Hybrid = $2,200.00
Chrysler Aspen Hybrid = $2,200
Dodge Durango Hybrid =$2,200
Ford Escape Hybrid = (2009) 2wd=$1,500; 4wd=$975.00(2008) 2wd=$1500.00; 4wd=$1100.00
Ford Fusion Hybrid = $3,400.00
GMC Yukon Hybrid = $2,200.00
Honda Accord Hybrid = No longer sold
Honda Civic Hybrid = Expired.
Honda Insight Hybrid = Expired.
Lexus RX400h Hybrid = Expired
Mazda Tribute Hybrid = (2008) 2wd=$1500.00; 4wd=$975.00
Mercury Mariner Hybrid = (2009) 2wd=$1500.00; 4wd=$9750.00(2008) 2wd=$1500.00; 4wd=$1100.00
Ford Fusion Hybrid = $3,400.00
Nissan Altima Hybrid = $2350.00
Saturn Aura Hybrid = $1,300.00
Saturn Vue Hybrid = $1,550.00
Toyota Camry Hybrid = Expired
Toyota Highlander Hybrid = Expired
Toyota Prius Hybrid = Expired

Should there be a new tax credit for non-plug-in hybrids? (more)
After the full credits have been reached, the full credit will still be available, but for only one more quarter. After this quarter, the credit will drop 50% for two more quarters, then 25% for two more quarters, and then it fully expires.

Also, depending upon your income, you may qualify for less than the full tax credit.

Sales, Other Tax and Fees Deduction for Vehicle Purchases

For questions, email Chuck Plake, E.A. at Plake Tax Service cplake@plakenet.com.

Sales, Other Tax and Fees Deduction for Vehicle Purchases

Audio: New Vehicle Tax Deduction

The American Recovery and Reinvestment Act of 2009 provides a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles through 2009. It also provides for the deduction of other taxes or fees paid in states with no sales tax. The deduction is available regardless of whether a taxpayer itemizes deductions on Schedule A.

Purchases before Feb. 17, 2009, are not eligible for this special deduction.

The deduction is limited to the tax on up to $49,500 of the purchase price of an eligible motor vehicle. The deduction is phased out for joint filers with modified adjusted gross income between $250,000 and $260,000 and other taxpayers with modified AGI between $125,000 and $135,000.

Taxpayers who make qualifying new vehicle purchase this year can estimate their deduction with the help of IRS Publication 919, How Do I Adjust My Withholding? Lines 10a to 10k on Worksheet 10 take into account purchases above the $49,500 limit, as well as the income phase-outs.

Related Items:

• IR-2009-60, Special Tax Break on New Car Purchases Available in States With No Sales Tax
• IR-2009-30, Special Tax Break Available for New Car Purchases This Year
• Flyers, posters and marketing products
• Seven Facts about the New Sales Tax Deduction
• The American Recovery and Reinvestment Act of 2009: Information Center

Do Your Own Loan Modification.

First, collect your data. You will need to prove your current income and show outgo. Collect information about your monthly gross income (before tax) of your entire household, such as pay stubs, and other supporting data that shows part-time or self-employment work, such as income tax returns. Gather information about your assets, such as stocks, bonds, car, house, or anything that has value. You will need information about checking or savings account. Other necessary required data is information about all mortgages on the house, minimum monthly payments and account balances on all of your credit cards, car loans student loans or any other debt. Draft a letter describing your hardship, i.e. the reasons that caused your loss of job or income to be reduced, your expenses to increase or any, a divorce, illness, etc.

Secondly, call your lender or servicer. Ask to speak to someone about a “Home Loan Modification.” Their telephone number should be on your monthly statement or coupon book. Be honest when you tell them about your situation. They will determine by applying guidelines if you qualify for a loan modification. The goal is to get the lender or servicer to send their loan modification package requesting your information.

Thirdly, organize the package. Make the package easy to track. Number the pages and include a table of contents showing the page number of each document. Lenders or servicers are busy with the many requests for loan modifications that they have on file. Any assistance in organizing your papers will help the decision to be reached faster.

Feel good that you presented a good picture of your new financial condition. A leading factor used in applying for a loan modification is a change in your financial condition that makes paying your current mortgage a hardship. The information showing the change in your financial condition that you provide to your lender when requesting a loan modification is the most important document to prove your case. This is the “make or break” document that for the most part is one of the main documents that the lender bases their decision on. You will have peace of mind if you have clearly presented your current financial condition thoroughly, accurately and with honesty.

FAQ about the First-Time Homebuyer's Credit

For questions, email Chuck Plake, E.A. at Plake Tax Service cplake@plakenet.com.

Below is a video about the many questions clients have asked about the First-Time Homebuyer's Credit.

Check Withholding to Avoid a Tax Surprise

For questions, email Chuck Plake, E.A. at Plake Tax Service cplake@plakenet.com.

Issue Number: Special Edition Tax Tip 2009-4

Video: Making Work Pay - Withholding Calculator
Audio: Making Work Pay - Withholding Calculator

With 2009 nearly half over, the Internal Revenue Service reminds individual taxpayers there is no better time to check their 2009 federal income tax withholding levels to make sure they do not face any surprises when returns are due next spring.

The Making Work Pay Credit lowered tax withholding rates this year for 120 million American households. However, particular taxpayers who fall into any of the following groups should review their tax withholding rates to ensure enough tax is withheld: multiple job holders, families in which both spouses work, workers who can be claimed as dependents by other taxpayers and pensioners.

Failure to adjust your withholding could result in potentially smaller refunds or may cause you to owe tax rather than receive a refund next year. So far in 2009, the average refund amount is $2,675 and 79 percent of all returns received a refund.

Because retirees typically have withholding from their pension payments, pension plan administrators or pension payors should be aware of the optional adjustment procedure for pension withholding announced in Notice 1036-P, Additional Withholding for Pensions for 2009.

Social security beneficiaries, supplemental security income recipients, disabled veterans and railroad retirees that receive this year’s one-time $250 economic recovery payment should be aware that the Making Work Pay credit will be reduced by the $250 payment amount. They may also want to review their withholding.

The IRS withholding calculator on IRS.gov can help a taxpayer compute the proper tax withholding. The worksheets in Publication 919, How Do I Adjust My Withholding?, can also be used to do the calculation. If the result suggests an adjustment is necessary, the taxpayer should submit a new Form W-4, Withholding Allowance Certificate, to his or her employer or adjust the amount of quarterly tax paid.

In addition, the IRS reminds unemployed workers that the first $2,400 of unemployment benefits they receive during 2009 are tax-free for federal income tax purposes. People who expect to receive more than that should consider having tax withheld from their benefit payments in excess of $2,400. Use Form W-4V, Voluntary Withholding Request, or the equivalent form provided by the payer to request withholding to begin or end.

Taxpayers should visit IRS.gov for more information about how to adjust federal income tax withholding. The Web site also has details on various tax incentives in the American Recovery and Reinvestment Act as well as downloadable forms and publications. Free tax forms and publications are also available by calling 1-800-TAX-FORM (1-800-829-3676).

Links:

• The Making Work Pay Credit
• Notice 1036-P, Additional Withholding for Pensions for 2009
• IRS withholding calculator
• Publication 919, How Do I Adjust My Withholding?
• Related News Releases and legal guidance
• Publication 4766, Making Work Pay Credit and Form W-4 Withholding Certificate

Federal Tax Credits for Energy Efficiency

By: Diane Tuman, Zillow Content Manager June 10, 2009

Don’t qualify for the Obama Refinance or Loan Modification programs but still want your piece of the pie? Under the American Recovery and Reinvestment Act of 2009, the Feds will pay you to save energy through home improvement projects (and energy-efficient autos).

Quick summary of Energy Tax Incentives (from Department of Energy):

Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in existing homes can receive a tax credit for 30% of the cost, up to $1,500, for improvements “placed in service” starting January 1, 2009, through December 31, 2010.

What you need to know about Federal Tax Credits for Energy Efficiency (from ENERGY STAR):

• must be “placed in service” (i.e., installed) from January 1, 2009 through December 31, 2010
• must be for taxpayer’s principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes and rentals qualify)
• $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
• must have a Manufacturer Certification Statement to qualify
  for record keeping, save your receipts and the Manufacturer Certification Statement
  improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695 (2009 version) — it will be available late 2009 or early 2010
• If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.

So, what is a tax credit?

A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.

One big caveat

According to the non-profit Alliance to Save Energy, “In order to be eligible for the tax credit, heating and cooling equipment must meet specified measures of energy efficiency. Individuals can search for qualifying products on the, Consortium for Energy Efficiency’s Web site.

So, if you were planning on doing these upgrades to your home anyway, make sure to follow the guidelines so you can get a tax credit! While you’re at it, check out home improvement ideas.

Further reading:

Energy Provisions of the American Recovery and Reinvestment Act of 2009 [IRS]
New IRS Incentives, from Hot to Cold [NY Times]
Energy-Efficiency Home and Vehicle Tax Credits [Alliance to Save Energy]
Stimulus Package: Homeowner Perks [CNN]

Why apply for a home loan modification?

For questions, email Chuck Plake, E.A. at Plake Tax Service cplake@plakenet.com.

A home loan modification changes your loan terms without refinancing for a new loan. It requires negotiations (discussions) between you and your lender. The terms of your loan are restructured to fit your current financial situation. Reasons to modify your loan are:

• To lower your interest rate,


• To reduce your high payment,


• To reduce your principal balance,


• To change your adjustable rate to a fixed rate,


• To increase your loan term,


• To assist you for missed payments, penalties and fees,


• To provide temporary assistance to skip or reduce mortgage payments


• To bring property tax and insurance payments current,


• To stop foreclosure on your home,


• To assist you with any type of financial hardship,


• To prevent you from being thrown out on the street,


• To get you out of a negative amortization loan, or


• Any combination of the above.

Due to today’s real estate market and the economy, all homeowners should ask their lender for a loan modification, whether they are facing foreclosure or not. You do NOT have to be behind on your payments to request a home loan modification.

Many homeowners get depressed and struggle to negotiate with a lender. The lender has certain guidelines they must follow, so a better term than ‘negotiate’ is ‘discuss’. Just as some people prepare their own taxes or represent themselves in small claims court, many homeowners are knowledgeable enough about real estate and mortgage lending to handle their own loan modification. Don’t be afraid to contact your lender. Doing so will save you big bucks. But be prepared.

Don't pay $1,000, $2,000 or $3,000 for something you can do. Do It Yourself!




Checkout the eBook and follow the guidelines: Loan Modification: Simple As 1-2-3.

What does your lender look for in modifying your loan?

For questions, email Chuck Plake, E.A. at Plake Tax Service cplake@plakenet.com.

Don't pay an attorney big bucks to do what you can do. Applying for a loan modification is as simple as 1-2-3. Call the lender yourself.

Following are the main things the lender will apply your information to their guidelines in order to fit you in their options:

• Repayment Plan: The lender may consider a payment plan that will fit your budget and possibly bring your account current by the end of the plan.


• Loan Modification: The loan modification program may allow the terms of your loan to be adjusted and brought current.


• Extension: This plan will provide a payment relief option to bring your account current by putting the past due amount on the end of the loan and allow you to continue making your monthly payment.


• Homes Sales Program: If your home is listed for sale or you are thinking about listing your home with a realtor, the lender will work with your agent to help you resolve this issue in the best way possible.

Don't pay $1,000, $2,000 or $3,000 for something you can do. Do It Yourself!

Checkout the eBook and follow the guidelines: Loan Modification: Simple As 1-2-3.

Special Tax Break on New Car Purchases Available in States With No Sales Tax

For questions, email Chuck Plake, E.A. at Plake Tax Service cplake@plakenet.com.

Issue Number: IR-2009-060

WASHINGTON —The Internal Revenue Service and Treasury Department today announced that a tax break for the purchase of new motor vehicles is available in states that do not have a state sales tax. Under the American Recovery and Reinvestment Act of 2009, taxpayers who buy a new motor vehicle this year are entitled to deduct state or local sales or excise taxes paid on the purchase.

The IRS and Treasury have determined that purchases made in states without a sales tax – such as Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon – can also qualify for the deduction.

The IRS said today that taxpayers who purchase a new motor vehicle in states that do not have state sales taxes are entitled to deduct other fees or taxes imposed by the state or local government. The fees or taxes that qualify must be assessed on the purchase of the vehicle and must be based on the vehicle’s sales price or as a per unit fee. According to the IRS, Congress intended for these fees or taxes to qualify for this special tax deduction.

“This special tax break is available for people purchasing a new car this year, and that can include people in states without a sales tax,” said IRS Commissioner Doug Shulman. “This means that more people can take advantage of this deduction when they file their tax returns next year.”

To qualify for this deduction, the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010. Taxpayers can claim this special deduction only on their 2009 tax returns to be filed next year.

The deduction is limited to the fees or taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle.

The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

The special deduction is available regardless of whether taxpayers itemize deductions on their returns. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return. The IRS reminded taxpayers the deduction may not be taken on 2008 returns.