How to Buy a Hybrid and Get a Tax Break

If you are trying to decide on a hybrid car or SUV, consider what you might save in addition to the negotiations with the dealer. According to the Energy Policy Act of 2005, you can pick up an Alternative Motor Vehicle Credit where you can receive up to $4000 for a hybrid used in your household. Here's how!

Difficulty: Easy

Instructions

1. Call your local tax advisor, prior to purchasing your hybrid, to see how the Alternative Motor Vehicle Credit adapts to your personal situation. Always consult a tax professional for tax advice.

2. You will need to fill out a tax form 8910 to acquire your tax break for the hybrid. It is a tax credit that will be phased out after several years, but for the time being it does apply to those looking for greener vehicles.

3. The 8910 form asks detailed questions about the hybrid vehicle and reflects on the miles and usage of the vehicle. In particular, the credit has a large amount of basis for the lifetime of fuel savings.

4. Once the form is filled out and reviewed by your tax preparer, you submit it with your yearly paperwork. Depending on your income bracket, you can save up to $4000 for investing in a new hybrid vehicle.

Tips & Warnings

• State governments are also starting to offer tax breaks for those who purchase or use a hybrid in daily driving. Find out the local rules for your state to see what tax breaks you can acquire before you purchase a hybrid!

[justmeboy22]

on 1/14/2009 nice article! great info

[shizzo]

on 1/6/2009 I just recently heard that there is a patent ou there for a capacitor that can hold enough energy to power a car. It is non-toxic, and has unlimited charging cycles unlike lithium ion batteries. Imagine the money that you can get for that.