Drive Your Taxes Down
If you’re in the market for a new car or you’ve purchased one this year, you might also be in for some great tax benefits.
That is, if you purchase a plug-in electric vehicle or low-speed or two-or three-wheeled vehicles.
The Federal government offers in income-tax credit that could save you big on your taxes and helps to reduce the effective cost of the vehicle. For instance, if you purchase an electric car.
Let me be clear. This is not a purchase rebate. You won’t see a check in the mail. Instead, when you file your 2016 taxes you’ll be able to take a credit. And the credits are substantial, ranging from $2,500 to $7,500 for battery-electric and plug-in hybrid passenger cars, based on the size of the battery pack.
According to GreenCarReports.com, “The minimum pack size is 4 kilowatt-hours, and the scale runs from 4 kWh to 16 kWh (or more).” They even offer the following examples, which illustrates that you will be eligible for the credit even if you buy a used electric vehicle.
2012-2015 Toyota Prius Plug-In Hybrid: $2,500
2013-2016 Ford Fusion Energi & C-Max Energi: $4,007
2011-2016 Chevrolet Volt, Nissan Leaf, Tesla Model S, others: $7,500
There’s also a second tax credit available for low-speed and two- or three-wheeled vehicles.
It is possible that some vehicles may actually qualify for both credits, but the IRS allows taxpayers to apply only one credit to any single vehicle.
The tax credit for low-Speed, motorcycle and three-wheeled vehicles is equal to 10% of the cost of the vehicle with a maximum credit $2,500 per vehicle.
So, ladies and gentlemen, start your engines! The race for tax credits is on as 2016 speeds to an end!