Tax Credits For Toyota Hybrids To Be Cut In Half

Tax Credits for Toyota Hybrids to​ Be Cut in​ Half
If you​ purchase a​ new hybrid car after January 1,​ 2018,​ you​ can get a​ major tax credit for doing so .​
Alas,​ the​ tax credits applicable for Toyota hybrids are about to​ be cut in​ half .​
Tax Credits for Toyota Hybrids to​ Be Cut in​ Half
The government uses all types of​ methodology to​ modify our behavior .​
While many look for nefarious conspiracies and such,​ the​ government usually does it​ right before our eyes .​
The most obvious area of​ behavior modification is​ with taxes .​
In this case,​ the​ government has made an​ effort to​ boost energy conservation by giving us massive financial incentives to​ purchase hybrid vehicles .​
The incentives come in​ the​ form of​ tax credits .​
A tax credit is​ the​ golden egg of​ taxes .​
Whereas a​ tax deduction,​ such as​ the​ mortgage interest deduction,​ is​ used to​ lower the​ adjusted gross income you​ will have to​ use to​ figure out the​ amount you​ owe off the​ tax tables,​ tax credits get right to​ the​ heart of​ the​ matter .​
You see,​ tax credits are deducted dollar for dollar from the​ amount of​ tax you​ owe .​
If you​ figure out your adjusted gross income,​ go to​ the​ tax tables and then figure out you​ owe $8,​000 for the​ year,​ the​ tax credit is​ then subtracted from this amount .​
Golden egg,​ indeed .​
In the​ case of​ hybrids,​ the​ government wants to​ motivate us to​ buy them,​ but only to​ a​ certain extent .​
The government is​ more or​ less trying to​ make them an​ acceptable part of​ our society,​ not give them a​ free ride forever .​
As a​ result,​ the​ tax credits applicable to​ the​ purchase of​ hybrids phase out after certain sales goals are met .​
Specifically,​ the​ tax credits start being reduced once a​ manufacture sells 60,​000 hybrid vehicles .​
The IRS reviews the​ sales number each quarter to​ keep a​ tab on​ how the​ manufacturers are doing .​
In the​ case of​ Toyota,​ the​ IRS has determined that the​ company reached the​ 60,​000 mark this last quarter .​
Specifically,​ it​ hit the​ mark in​ May .​
As a​ result,​ the​ tax credit that can be claimed for buying a​ Toyota hybrid will begin to​ be phased out .​
Beginning in​ October 2018,​ the​ tax credit for each model of​ Toyota and Lexus [owned by Toyota],​ will be reduced by a​ whopping 50 percent .​
In April of​ 2018,​ the​ credits will be cut again,​ this time to​ 25 percent of​ the​ original credit amount .​
In October of​ 2018,​ the​ credit will be terminated completely .​
The tax credit amount is​ determined by vehicle,​ so you​ will have to​ determine the​ equivalent cut for the​ model you​ are interested in​ .​
If you​ have been paying attention to​ the​ dates,​ you​ may have noticed something interesting .​
The reduction for the​ Toyota hybrid tax credit does not happen immediately .​
You can still go out today,​ purchase a​ Toyota hybrid and claim the​ full tax credit .​
Once we roll into October 2018,​ that will no longer be the​ case.
Tax Credits For Toyota Hybrids To Be Cut In Half Tax Credits For Toyota Hybrids To Be Cut In Half Reviewed by Henda Yesti on June 30, 2018 Rating: 5

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