How to Get a Subaru Tax Credit

January 27, 2012

If you are eligible for a Subaru tax credit, you may be able to save thousands of dollars on the amount you owe in Federal income taxes. If you are not familiar with tax credits, just be aware they are much better than deductions. Credits reduce the amount of tax you owe, while deductions only lower the amount of your taxable income. So, if you want to find more information and use a tax credit to lower your tax bill, here's how to do it.

What You Will Need

  • An Internet-connected computer
  • A Subaru that qualifies for a tax credit
  • Basic Internet research skills

Step 1 - Find a Subaru Tax Credit Online

Use the Internet to quickly find tax credits that can save you money at tax time. Use your favorite search engine and enter search terms like "Subaru tax credits" or "tax credits for new cars", and then click on the search button. Follow a couple of the more relevant links to sites where you can find information on new car tax credits that are available for the current tax year.

Step 2 - Check to See if Your Subaru is Eligible

When reviewing sites that offer information about available tax credits, make sure your particular make and model Subaru is included in the list of eligible vehicles. Also, make sure you purchased your Subaru at a time during the tax year that makes you eligible for a tax credit.

You may also want to visit the IRS website to find publications that provide detailed information about the makes and models of vehicles that are eligible for tax credits as well as criteria and requirements for the taxpayers that want to claim them.

While many tax credits authorized by Congress are general in nature and may be applicable to many makes and models of popular vehicles, other credits may require the purchase of a specific type or class of vehicle. For example, a fuel efficiency tax credit may be offered only on certain vehicle models that are considered environmentally friendly or green. Make sure your Subaru is eligible for the credit before continuing.

Step 3 - Consult with an Accountant or Tax Professional

Even if you are sure your Subaru qualifies for a tax credit, you may want to consult with an accountant or other financial advisor or professional. Although the Internet provides excellent information on requirements for available tax credits, the web is no substitute for the advice of a professional.

Step 4 - Get the Correct Forms for Your Tax Credit

Ask your accountant or tax professional for the appropriate forms needed to apply for your Subaru tax credit. Alternatively, you can visit the IRS website and download them to your computer and print them out.

Step 5 - Use the Credit to Reduce the Tax You Owe          

Once you have all the forms you need, follow the included instructions to properly calculate the amount of your Subaru tax credit. Then, list the amount of the credit on your income tax return and deduct it from the amount of tax you owe to the IRS.

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