Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

2004 TOYOTA PRIUS QUALIFIES FOR HYBRID DEDUCTION

October 10, 2003

The tax law in its wisdom remembers the both the large and the small - at least when it comes to vehicles. While giant business SUVs get extra deductions, "greener" vehicles also enjoy the benevolence of the Code. A "qualified clean-fuel vehicle" placed in service in 2003 qualifies its owner for a $2,000 tax deduction.

The IRS recently certified the 2004 Toyota Prius for this deduction.

This deduction is availabe whether or not the car is used for business, regardless of whether the taxpayer itemizes. There will be no separate line for it on the 2003 return; instead, taxpayers will write the words "clean fuel" next to the deduction on line 33 of their form 1040.

ACT NOW!

This deduction will decline to $1,500 for vehicles purchased in 2004; if you are going to be green, it's best to do it now.