Tax Write Offs for Eco-friendly Vehicles
Save up to $7,500 on your next vehicle–if it’s eco-friendly? Have you thought about an electric or plug-in hybrid car? If so, you could save! Not to mention the savings on fuel at the pump by using an electric vehicle. Most business owners are aware they can write off some of the costs of operating a standard vehicle for business use. To include, operating expenses, or the standard mileage deduction. Electric or plug-in hybrid vehicles are different. They are considered eco-friendly and, they are eligible for tax credit; money that comes right off the top of your tax liability — just for purchasing an eco-friendly vehicle. And you don’t even need to use the vehicle for business purposes in order to get the tax credit — consumers using a vehicle for their own personal purposes may be able to claim this electric vehicle tax credit.
How Does This Work?
Well, here in the U.S., purchasers of certain all-electric or plug-in hybrid cars are entitled to a tax credit based on the vehicle’s battery capacity.
Other Requirements:
– You must be planning to use or lease the vehicle, not merely resell it, in order to qualify.
– Also, you must be the original user of the vehicle in order for the tax credit to be applicable, so again buying used or reselling such a vehicle will void the benefit. And the vehicle must be used primarily in the U.S.
Vehicles currently qualifying for the tax credit include the 2017 BMW i3 Sedan, the 2017 Chevrolet Bolt, the 2017 Chrysler Pacifica Plug-in Hybrid and the 2016 Tesla Model X.
Another Important Limitation:
– The full tax credit for all these vehicles begins to scale back after the manufacturer sells its 200,000th plug-in hybrid or all-electric car in the U.S. (For example, one previously qualifying vehicle, the Chevy Volt, passed the 100,000-vehicle sales mark in July 2016 and the Nissan Leaf did so in October 2016.)
Confused? Don’t worry. The Internal Revenue Service posts a list of cumulative sales for plug-in electric vehicles that should help you keep track. And a complete list of cars that qualify for the tax credit is also posted at FuelEconomy.gov.
Takeaway
Have you thought about an electric or plug-in hybrid car? If so, now is the time to save! No need to stress, still confused? Give us a call today! (256) 489-1478 or schedule an appointment now.
We offer so much more than just tax prep.
