Energy-efficient vroom vroom!

I'm a race fan.

In fact, when I began writing this, I was watching the NASCAR Nationwide series race from Talladega. Earlier in the day, there was Sprint Cup qualifying from 'Dega.

And before that, on DVR because 6 a.m. is just too darn early any day, but especially on a Saturday, the F1 boys fought for the pole in Bahrain. The hubby and I will watch that tape tonight as part of our exciting weekend.

So, being a confirmed fast and furious addict, when Forbes magazine said it had found the 10 fastest fuel-efficient cars, I had to take a look. 

I won't spoil the surprise, but as you might suspect, and Forbes acknowledges, "fuel efficiency" is a relative term and the economy ratings of the vehicles on the list are less than stellar. Still a couple get around 20 miles per gallon.

My celebration of stylish gas guzzlers, especially given climate issues and last week's Earth Day celebration, might seem a bit out of place. In my defense, my dreams of owning one of the vehicles on the Forbes list is just that: a dream.

Although the Corvette or even the Mercedes convertible that made the list just might, with a little budget finagling, be doable….

Pricey Prius: Of course, sticker shock can be an issue for very fuel-efficient autos, too.

Take the Prius. A lot of folks have crunched the numbers to see how long it would take for pump price savings to offset the popular hybrid's manufacturer's suggested retail price. In some cases, the answer was "never" and buyers opted instead for strictly gas-fueled autos that get respectable mileage.

So Toyota is dropping the price of a Prius somewhat.

The Japanese automaker announced last week that a base model Prius priced at $21,000 will be available later this year.

The most expensive, fully loaded Prius model, however, still will cost around $27,000.

Vehicular sales tax break: The federal tax credit for buying any Toyota hybrid is long gone, but if you still want one of the Japanese car maker's vehicles, hybrid or otherwise, you can still get some help from Uncle Sam.

As has been the case for the last few years, the sales tax on your auto purchase can be added to the other state and local sales tax amounts you claim on your Schedule A. This tax break, however, requires two things.

As indicated by the Schedule A reference, you have to itemize to claim it. And most taxpayers then must choose between claiming the amount of state and local sales taxes paid and state and local income taxes paid.

But thanks to a provision in the American Recovery and Reinvestment Act signed into law on Feb. 17, you don't have to itemize to claim the auto sales tax deduction on your 2009 return.

Early reports indicated that folks who take the standard deduction, which the majority of taxpayers do, will add the eligible vehicle sales tax to that amount. This is the same process used this filing season by standard deduction filers who added real estate tax payments to that amount.

However, IRS statements to date simply say that "this deduction will be on your 2009 tax return" and "you don't even have to itemize in order to take it. If you meet the income guidelines and your vehicle meets the qualifications, you can take it on your tax return."

The IRS' own Seven Facts about the new deduction are equally vague about the specifics. But since we still have nine months before we have to worry about fling our 2009 taxes, we can wait for the IRS to sort out details.

Vehicle sales tax limits: Now about those qualifications. As is the case with most tax breaks, there are a few rules to follow in order to get this easier-to-claim sales tax deduction.

Only new vehicles purchased on or after Feb. 17 and by Dec. 31 of this year qualify for the deduction.

Note the words "new" and "purchased." If you're leasing a car or you're buying a used car, this tax break does not apply. Your vehicle, however, doesn't have to be a 2009 model. As long as you are its first owner, the vehicle qualifies as new.

Also note the word "vehicles." Your motorized purchase doesn't have to be a car. The new tax deduction also applies to newly acquired SUVs, light trucks or motorcycles as long as they weigh no more than 8,500 gross pounds. That means some motor homes (aka RVs) also qualify.

The deduction, however, is limited to the state and local sales and excise taxes paid on up to $49,500 of the vehicle's purchase price. So if you buy, say, that Mercedes-Benz convertible I covet for $65,000, then tax on $15,500 of the auto's purchase price is not deductible.

In addition to the vehicle price, you have to pay attention to your income. The deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

Comments

[GetSheila]

I have never understood the "pump price savings to offset the Prius' retail price" question. Do those same people quantify the prestige factor of owning a Hummer or Mercedes or some other ridiculously priced vehicle and calculate how long it will take to offset the purchase price?

I bought my Prius because it has a ginormous hatchback into which I can stuff all my, well, STUFF. Getting to feel morally superior is just a bonus. Heh.