IRS Certifies 2006 Toyota Hybrid for Clean Fuel Deduction
The Internal Revenue Service has certified the 2006 Toyota
Highlander Hybrid as being eligible for the clean-burning fuel
deduction. This certification means that taxpayers who purchase
one of these hybrid vehicles new during calendar year 2005 may
claim a tax deduction of up to $2000 on Form 1040.
Under Working Families Relief Act of 2004, which was signed into
law in October of 2004, the clean-burning fuel deduction is
limited to up to $2,000 for certified vehicles first put into
service in 2005 and $500 for vehicles placed in service in 2006.
No deduction will be allowed after 2006.
Federal Law allows individuals to claim a deduction for the
incremental cost of buying a motor vehicle that is propelled by
a clean-burning fuel. By combining an electric motor with a
gasoline-powered engine, these hybrid vehicles obtain greater
fuel efficiency and produce fewer emissions than similar
vehicles powered solely by conventional gasoline-powered engines.
This one-time deduction must be taken in the year the vehicle is
originally used. The taxpayer must be the original owner.
Individuals do not have to itemize deductions on their tax
return to claim this deduction. This benefit can be taken as an
adjustment to income on the Form 1040.
The amount of the deduction for the Toyota Highlander Hybrid was
set after the manufacturer, Toyota Motor Sales, U.S.A., Inc.
documented for the IRS the incremental cost related to the
vehicle