IRS Certifies 3 Honda Vehicles for the Clean Fuel Vehicle Deduction

The IRS has certified three Honda cars for the clean-fuel vehicle deduction. If you purchase these cars new (not pre-owned), the IRS allows you to take a clean-fuel deduction of up to $2,000 on your 1040. The three Honda cars are the 2005 Honda Insight, the Honda Civic Hybrid, and the Honda Accord Hybrid. According to the current tax law, you can take a deduction of up to $2,000 on your 2004 or 2005 tax return (depending on which year you bought the car). The deduction goes down to $500 in 2006, and no deduction after that. (This tax benefit may be extended, but this is how things stand right now.)

IRS Annoucement: Honda Vehicles Certified for Clean-Fuel Vehicle Deduction
List of All Vehicles Certified for the Clean-Fuel Vehicle Deduction
Hybrid Car Tax Deduction - from the About.com Guide to Hybrid Cars

You claim this deduction on the line for total adjustments to income (line 35 on your 2004 Form 1040). Write "Clean Fuel" on the dotted line, and include the deduction in the total figure for line 35.