How to Get a Ford Tax Credit

January 27, 2012

Ford tax credits or deductions may help to offset the cost of the vehicle and make it a little more affordable. The money you can save might be more than you think. Credits help to reduce the actual amount of the tax you owe, so you should always be on the lookout for them.

In recent years, congress has passed several types of credits and most of them are only available to taxpayers for a limited time. For example, "Cash for Clunkers" and tax credits for hybrid vehicles helped taxpayers save billions of dollars in personal income taxes. While specific types of Ford tax credits are only available for a year or two, there is usually some type of credit or deduction available that can help you save money on your income tax.

Trade in a Vehicle on a New Ford
Sales tax can add a few thousand dollars to the cost of a new Ford vehicle, so avoid paying sales tax as much as possible. When you buy a new Ford, consider offering the dealer a trade in vehicle. A trade-in reduces the price of a new car, so it lowers the amount of sales tax you pay considerably.

The amount paid to you by the dealership for your trade-in vehicle is taken off the top of the price of the new Ford. This results in you only having to pay sales tax on the balance and not on the original sales price of the new car. In short, the more the dealer offers you for your trade-in, the more you save in sales tax.

Keep Your Receipts
When it's time to file your federal income tax return, itemizing your deductions could help you save on your tax bill. Be sure to keep all of your receipts for gasoline, oil or repairs for your Ford. The IRS allows you to deduct a certain amount of these expenses from your taxable income--if you have copies of your receipts and records.

If you use your vehicle for work related trips, or need to visit the doctor or the hospital, related expenses for these types of travels may be tax deductible as well. Make sure to keep records for any deductions that you claim for five to seven years, just in case you're audited.

Record Your Mileage
If you really want to maximize deductions for your Ford, record the mileage for your vehicle. Be sure to record the mileage both before and after you drive the vehicle. Also, create a section that describes what you used your vehicle for and where you went.

This type of detailed record-keeping will help you save more money on your taxes as the government may allow you to deduct a certain amount per mile for certain type of educational, medical or work related travel expenses.

Keep Carbon Emissions Low
If you live in a state that requires emission testing or a smog test, keep your vehicle properly tuned to save on fees and taxes associated with type of testing. Some states may penalize you, charging higher taxes or requiring that you take a smog test multiple times before issuing a clearance for your vehicle. A well tuned vehicle not only causes less pollution, and saves on smog test fees, it is also more reliable and needs fewer repairs. Remember, car repairs usually have sales tax included with bill as well.

Know What Tax Credits and Deductions Are Available

Always be aware of what types of tax credits or deductions are available for your Ford vehicle. Some tax credits require that a vehicle be less than a certain weight, or of a given type or be priced under a certain amount. You may be required to purchase a new Ford vehicle within a certain time frame. Check to make sure that your particular Ford vehicle meets all requirements needed to be eligible a tax credit.

Review Information on the IRS Website
Once you have found tax credits or deductions you think you may be eligible for, visit the IRS website to make sure. On their site, you'll be able to search for information or publications that provide information on exactly what types of vehicles qualify for credit, and which types of taxpayers are eligible to claim them. The IRS allows you to easily search their site for articles or publications related to car tax credits or deductions. Try several different terms, and variations of terms, in order to find results for tax credits and deductions for your Ford vehicle.

Download Tax Credit Forms and Returns
The IRS provides access to any forms that may be needed to claim a Ford tax credit. Take note of the needed form numbers and download them from the IRS forms download section.

Apply the Tax Break on Your Return
On the forms provided by the IRS, there will be detailed instructions on how to go about claiming any credit you may be eligible for. Be sure to follow the instructions precisely and deduct the credit from the amount of income tax due on your tax return.

The Best Ford Models for Cheap UK Road Tax

The UK has been levying a "vehicle excise tax" or road tax for several years in order to fund public projects. The road tax is computed according to engine size, emissions and other factors.

Ford vehicles in the UK are subject to road tax rates. These vary according to the model, from the tiniest Ford compact vehicle options to larger specialty vehicles. Here are some of the best Ford models for cheap road tax in the UK.

  • Ford Fiesta. The cheapest Ford road tax rates start with the Ford Fiesta ECOnetic 1.6 TDCi. Ford's greenest Fiesta is a "turbodiesel" vehicle designed for energy efficiency. In the UK market, the Fiesta ECOnetic competes with models like the VW Polo BlueMotion and the Seat Ibiza Ecomotive from Spain. Some UK drivers give this Ford wagon high marks for handling and functionality on London roads and around the island. And as for road tax, this sedan generates no road tax due to its fuel efficient design
  • Ford Sedans. Larger sedans include the Ford Fusion and Ford Focus, as well as the Ford Ka, a vehicle not present in Ford's domestic market. These cars, with 1.4L or 1.6L engine sizes, tend to generate road taxes of £30 to £90
  • Ford Mondeo. Up toward the top of the road tax chart, there's the Ford Mondeo. Named after the Latin for "world," this car is one of Ford's top international offerings. With a slightly larger engine, the Mondeo can generate a road tax of up to £125 a year. Another similar model, the Ford C-Max, will be likely to cost the driver £125 annually
  • Ford Mustang. Then there's the specialty car popular with road power aficionados, the Ford Mustang. This perennial favorite can be shipped to the UK for and does not fall into a regular road tax category. It will be matched to a high road tax price of £185. Older Mustang models may be exempt from road tax if they fall under a "historic vehicle" status