Big new tax breaks for hybrid cars

Starting next year, buying a fuel-efficient vehicle will help keep IRS at bay.

NEW YORK (CNNMoney.com) – If you just bought a brand new fuel-efficient hybrid vehicle, sorry but you should have waited.

Starting Jan. 1, 2006, buyers of some hybrid vehicles can get a hefty tax credit. But the credits vary a lot and some very fuel-efficient vehicles still get no credits at all.
In some cases, though, the credits are large enough to almost entirely make up the additional cost of the hybrid vehicle as compared to a non-hybrid. That means any money you save on gas will actually go directly into your pocket.

Previously, some hybrid vehicle purchases have been eligible for tax deductions. The new credits, however, are subtracted directly from the money you owe the IRS. That makes these credits much more valuable than deductions.

CNN/Money