this year i bought an '06 scion xB, and i was told by some one, that i could get credit for it, suppossedly, it does good to the economics to buy a car. is this true????
2006-12-26 16:15:42 · 11 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
its primemiry use is for go and come from work, is that comsider business use?
2006-12-26 16:22:29 · update #1
If you live in a state without state sales tax you may be able to claim the sales tax for 2006 under a provision passed this week. The printed tax instructions are not yet updated to show this but you can check it out on the IRS website. I just found out about this ...... I pasted a link to the news release below. This would only apply to you if you live in a state with no income tax.
The American Jobs Creation Act of 2004 gave taxpayers the option to claim state and local sales taxes instead of state and local income taxes when they itemize deductions. This option was available for the 2004 and 2005 returns only.
Under the American Jobs Creation Act of 2004 there was such a provision (deduction) for 2005 taxes but it is not available in 2006. :(
Some cars get a hybrid credit this year. I didn't see your car on the list but you can check out www.fueleconomy.gov
If anyone knows of any new tax breaks I missed, do tell... the tax laws are soooo sneaky:)
Cheers,
2006-12-26 16:44:21 · answer #1 · answered by Beverly (Bea) 4 · 0⤊ 0⤋
Folks, Congress did NOT renew the Sales Tax deduction for 2006. So you can't include the sales tax in Schedule A like last year!
Scion isn't hybrid. So you can't take special deduction for hybrid vehicle.
You can deduct the property tax on Schedule A if you itemize your deduction rather than using the standard deduction (single person is $5150, married filing jointly is $10,300, head of household is $7550).
Sounds like the car is use used for commuting between home and work. If your job has a regular location, then you can not deduct your car expenses. See IRS Publication 17 Chapter 26 to see if you are qualified to deduct work travel expenses http://www.irs.gov/pub/irs-pdf/p17.pdf
If you are qualified to deduct travel expenses for your profession and work, there are two ways to deduct expenses (like gas, insurance, repair but not the cost for purchasing the car) - actual or standard. More explanation available in Publication 17 as well.
If the car is for business use (i.e. you are a business owner) the cost of the car is amortized over 7 years.
Regardless of which way you look at it, no way is the cost of the car deductible.
Best wishes.
2006-12-27 18:14:44 · answer #2 · answered by JQT 6 · 1⤊ 0⤋
If you itemize, you can deduct either the total of state and local taxes that you paid, or sales tax paid which includes sales tax paid on a car. The car could be new or used to claim this.
You can also get a credit for part of the price paid for a hybrid vehicle (which the scion doesn't qualify for). If you own a business, you can claim car expenses, but commuting back and forth to a job where you are an employee does not count for this - that's considered a personal expense, and isn't deductible.
2006-12-27 01:23:51 · answer #3 · answered by Judy 7 · 0⤊ 1⤋
Actually Congress just passed revised tax law and the State Sales Tax (suppose to be for 2004 and 2005 only) was brought back for 2006. Btw- Congress did not pass the new tax laws until mid December 2006 (Dec. 9, 2006 to be precise). The Sales Tax paid on your new vehicle, along with other big purchases or actual sales taxes paid (or a set standard) can be deductible if you are itemizing deductions with a Schedule A. To benefit from it, your sales taxes paid, DMV registration, real estate tax, mortgage interest, charitables, over 2% of AGI on unreimbursed work expense and over 7.5% of medical expenses paid (Sch. A items) must exceed your standard deduction.
As stated earlier, it sounds like your new vehicle was used for commuting to and from work and that is not a deductible work expense and it does not meet the requirements of the new Hybrid vehicle credit (only 6,000+ hybrids sold in 2006 qualify).
Hope this helps. If you need additional information to decide whether or not you benefit from itemizing rather than taking the standard deduction, check out www.irs.gov.individuals for more information.
Happy New Year! :)~
2007-01-01 06:15:33 · answer #4 · answered by Meg 2 · 0⤊ 0⤋
You can claim the sales tax you paid on your federal and possibly on your state income tax but you cannot deduct the full price you paid. There are additional tax breaks for hybrid and some other alternative fuel vehicles but the Scion does not meet that criteria
2006-12-27 00:20:50 · answer #5 · answered by hartless63 4 · 2⤊ 1⤋
You can claim the state sales tax you paid on it which is considerable. There may be a form to fill out for the fed tax form for a tax credit for purchase of a car that uses alternative fuels, etc.
2006-12-27 00:20:59 · answer #6 · answered by Anonymous · 1⤊ 1⤋
I believe that this is only true if you use the car for your own business purposes. If you plan on filing a 1099 or something like that, tax deduction!
2006-12-27 00:19:27 · answer #7 · answered by Rica_Venia 3 · 0⤊ 0⤋
Only if the car is for a business. Then the IRS has specific rules regarding how much and what type of car.
2007-01-01 19:41:10 · answer #8 · answered by B 4 · 0⤊ 0⤋
tax laws are very complicated but in general you can only deduct the purchase of a vehicle if it is used for a business. commuting to and from work doesn't count.
2006-12-27 00:26:04 · answer #9 · answered by QandA 3 · 0⤊ 0⤋
the only cars i know of that you can claim on your taxes is if you buy a hybrid car you can get up to a 2600 dollar refund if you buy one.
2006-12-27 00:27:14 · answer #10 · answered by Anonymous · 0⤊ 0⤋