i had my taxes done today, and my tax person said i was the first person she personally has had come in with a hybrid, though it was not the first in her office.

with my 2005 civic, it amounted to $2000 taken off the front end, is how she described it. what it did was almost double my refund from both the feds and the state. i am sure it will depend on your total income, but it had a rather nice effect for us.

 

$2000 of the front end? Are you sure she did it right and didn't count it as a credit when it shoud have been a deduction?

 

We did our taxes through H&R last week and my 05 HCH did not help much. Please let me know how you doubled the amount.

 

If someone is in the 25% federal tax bracket then a $2000 deduction produces a reduction of $500 in their tax bill. If they were going to get a $500 refund without the hybrid, then the hybrid doubled their refund. If they were going to get a $50 refund without the hybrid, then the hybrid multiplied their refund times 10 (11 actually).

As for the term "front end", I don't know what it means. It's not a tax term. I suppose it's a way of describing a deduction vs. a credit.

 

i think that's what she meant. i have no clue on tax laws and what it all means, so i am simply relating what she told me.

 

I believe it means the same thing as "above the line" -- it's an adjustment to income (like IRA contributions) rather than a Schedule A deduction. So you get the tax break whether or not you itemize.

 

If I bought a 2006 HCH, I don't do anything until it's time for taxes next year - am I correct?

 

If you bought it NEW in 2005, it should be a deduction on 2005 taxes (this year).
If you bought it NEW in 2006, it should be a credit (better) on 2006 taxes (next year).

Buying used doesn't count for any tax deduction/credit, period.

 

Correct. It's taken off your 2006 taxes which you'll file sometime in 2007. It's a long time to wait but it's a nice chunk of change just for buying a car. Your taxes at work.

 

Right. They haven't even published the exact credit amount yet.