credit vs deduction
For 2005 it is a $2000 deduction for hybrids. For 2006 it is a variable tax credit, but does not apply to the Insight with a manual, only the CVT. A deduction means you can lower your taxable income by $2000, so if you're in a 15% bracket that will save you $300 in taxes, in a 28% bracket it will save you $560. Also the deduction will lower your income for state taxes as well. For 2006 you get a credit, which lowers your federal tax bill dollar for dollar.
So a $1000 credit is 2 to 3 times better than a $2000 deduction.
For 2005 it is a $2000 deduction for hybrids. For 2006 it is a variable tax credit, but does not apply to the Insight with a manual, only the CVT. A deduction means you can lower your taxable income by $2000, so if you're in a 15% bracket that will save you $300 in taxes, in a 28% bracket it will save you $560. Also the deduction will lower your income for state taxes as well. For 2006 you get a credit, which lowers your federal tax bill dollar for dollar.
So a $1000 credit is 2 to 3 times better than a $2000 deduction.
