Major Green Tax Deductions

[Right Lane Cruiser]

If you made the big splurge and upgraded to an electric vehicle, you qualify for some major dough.

Trey Granger - EARTH911 - February 15, 2010

Are these deductions really a major factor in purchasing decisions? --Ed.

Ah, tax season. The time of year where no accomplishment is unworthy of mention if it equals a write-off.

If you’ve taken the time (and money) to invest in energy-efficiency or other green initiatives, there’s likely a deduction for that. Here’s a quick breakdown of what you might be eligible for this year.

Behind the Wheel

First, the good news: If you participated in 2009’s Cash for Clunkers program to get a more fuel-efficient car with government incentive, your $3,500 or $4,500 rebate is not considered taxable income. Imagine how much more you’d have to deduct with this additional income.

Plus, if you went the whole nine yards last summer and purchased a hybrid car, you’re eligible for an energy tax credit. This means that not only can you potentially drive 1,000 miles on a single tank of gas, but you’ll also receive a financial incentive for it.

According to the Tax Incentives Project, the availability and amount of the credit are unrelated to the type of car that the purchaser replaced, meaning you’re still eligible even if you just traded in your old hybrid for a new one.

Now for the bad news: The hybrid tax credit has been around since 2006 but is now in the process of being phased out, so what once was... [Read More]

[Butterfly Mage]

The C4C really helped out one of my coworkers. He had a totally ancient van that was literally falling apart (he sometimes took the bus to work because his van started only on random occasions). When it did function, he got about 10 MPG and left a smoke trail behind that was reminiscent of the video game "Spy Hunter". So now he drives a Nissan Versa. Even though he isn't particularly into hypermiling, he said he gets close to 40 MPG. Yay! A C4C success story!

[nighthawk]

My father traded in his exploder that was rusted out and got 16 mpg for a 2009 HHR that he ended up getting $11k after discounts and C4C rebate. It helped him get a new car that he would have never been able to afford, he wont have repairs to pay for and the new car gets almost twice the mileage.

[ItsNotAboutTheMoney]

If I were looking to buy a new car at the end of 2010 instead of 2009 a $7,500 rebate could make a big difference to my purchase.

[Bruce]

The American Recovery and Reinvestment Tax Act of 2009 (the stimulus package) expanded the credit for plug-in vehicles, and it is now available for a new plug-in electric drive vehicle having a battery capacity of at least 4 kilowatt hours, which qualifies for a credit of $2,500. Each kilowatt hour of battery above this adds $417 to the credit, up to a maximum of $7,500 for vehicles up to 14,000 pounds gross vehicle weight

Subsidies for playthings of the rich. How about the rest of us?

[ksstathead]

Originally Posted by Bruce

Subsidies for playthings of the rich. How about the rest of us?

Um, C4C?

[ksstathead]

These subsidies also benefit the manufacturers who hire the rest of us.

[Butterfly Mage]

The only real downside to C4C was that my dead Accord was too efficient to qualify. On the bright side, I did get 51 MPG on my first drive in my new Insight-II I also scored 4.5 tree icons. Whoo-hoo!

[Right Lane Cruiser]

So you closed at the intended price? Very nice!

[Butterfly Mage]

Yup. It was $17,500 plus the 6% Maryland sales tax and nothing else. Whoo-hoo!