IRS Okays 2006 Toyota Prius Hybrid for Tax Deduction

Environmentally-motivated taxpayers who bought a 2006 Toyota Prius during calendar year 2005 have been certified by the IRS to claim the clean fuel vehicle deduction. Qualifying Prius-owning taxpayers may claim a deduction of up to $2,000 on line 36 of Form 1040.

The IRS stresses that the $2,000 deduction is for tax years 2005 and earlier. Starting in 2006 the deduction will be replaced with a credit, which will require a different certification. Get all the details at this IRS Web site.

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