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Hybrids Vechicle Tax Credit & Mileage Deduction   If I receive a W2 can I take mileage expense?  Can I deduct mileage if I do not receive a W2?   How much Mileage Deduction can I take on my tax return?  What is the standard mileage rate and how do I compute it?   If I want to take actual expenses, how do I compute the deduction? Do I need to keep records of my mileage? What can I do if my records are incomplete? If I lease my car can I still take a mileage deduction? Can I take mileage if my employer reimburses me?

Hybrid Car Video


New Hybrid Car Tax Credit
The new energy bill allows a $400 to $3400 tax credit depending on model. A credit is much better than a deduction since a tax credit directly reduces taxes owed, as opposed to simply reducing taxable income.

On A Per Automaker Basis, Tax Credit Begins Slow Phase Out Once 60,000 Hybrids Are Sold.  The tax credit is set to expire in 2009, but for many hybrid models the incentive will end much sooner.

Once an automaker has sold 60,000 hybrid vehicles the tax credit for that automakers’ hybrids is slowly reduced over the next five consecutive quarters.

Hybrid Car Tax Credit Phase-Out Details

Beginning January 1, 2006 and up through the quarter that the automaker sells 60,000 hybrid vehicles, 100% of the credit is allowed.

100% of the hybrid car tax credit continues for the next consecutive quarter.
The next two quarters after that, the tax credit is reduced to 50% of the original hybrid