Usually get refund. How should i prepare for EV credit?

[jazzmanmonty]

I am curious. Are any of you seriously concerned about having enough income to afford to buy a Lightning (even pro model) yet not having enough income to have $7500 in tax liability? I know I sound like my Dad here, but if so I have a genuine question. Are you sure you can afford this truck?

As others have stated, its not an income issue for many. For me its the fact that i want to make sure Uncle Sam doesn't screw me out of any of the $7500 cuz i want as much of it as i can. My wife and I make great money and enjoy a very comfortable standard of living. We work normal jobs and just get normal W-2's. I can do my taxes in turbotax in less than 5 minutes if i wanted to.. But we also have a bunch of kids and that gives us lot of tax breaks per child as well as other things. But with that said, i'm not an accountant or self-employed or a business man to know enough of how it all works. So this whole EV tax credit was Greek to me and that's why i thought it was all based on if you get a refund or not. But many on here helped clarify how it works.

But as you asked, yes there are a lot of people that do overextend themselves and get in way over their head with stupid purchases. Like the mid 20's guy working at a fast food place for minimum wage but has a pimped out new Camero lol. You have to blame dealers sometimes as well, because unlike us older folks that are used to negotiating based on MSRP, the dealer ask customers how much they want to pay per month.. like a lease. People don't realize they are paying full MSRP, but think they are getting a great deal because the salesman bumped up the down payment and worked with several banks to find them the lowest rate plus money for the dealer on the back end to lower it within the margin that the customer wants to pay. So many of the younger generation look at a car payment like a cell phone bill. They think monthly payment vs. big picture true cost. These people that overextend themselves is also why repomen will always have work.

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[RickLightning]

So many of the younger generation look at a car payment like a cell phone bill. They think monthly payment vs. big picture true cost. These people that overextend themselves is also why repo men will always have work.

That's not just a younger generation thing. Lots of guys buying F-150s based on payment, that clearly can't afford them. And then financing a camper...

 

[Nick Gerteis]

That's not just a younger generation thing. Lots of guys buying F-150s based on payment, that clearly can't afford them. And then financing a camper...

….and a boat….

 

[RickLightning]

….and a boat….

Yeah...

As I've gone through life, I've been constantly surprised at the amount of stuff people buy that they clearly shouldn't be buying if they plan on paying for college for their kids, and someday retiring. Many let their kids go into hoc and are now begging for loan forgiveness, and retire with no means to pay for their retirement.

Was a guy in our development with the biggest house, bought a car at the auto show just before the housing crisis in 07/08. Lost the house, went bankrupt, all because he didn't know how to manage his money.

We kept our house, have a Mach-E, may buy a Lightning, have a boat (16' in our garage for now), are now retired, and by my plan we're good for all our retirement.

 

[TaxmanHog]

I doubt the OP is in any tax compliance problems, probably very few people are, but to be clear there are situations where enforced withholding is in place. The process has been modernized to address situations of intentional under withholding and it is dealt with.

A FAQ on the subject.

https://www.irs.gov/businesses/smal.../withholding-compliance-questions-and-answers

Good luck to everyone on securing your Lightning in wave 3 to 6 or next model year.

 

[astricklin]

I am curious. Are any of you seriously concerned about having enough income to afford to buy a Lightning (even pro model) yet not having enough income to have $7500 in tax liability? I know I sound like my Dad here, but if so I have a genuine question. Are you sure you can afford this truck?

Maybe someone has been saving up to buy it. Maybe someone has very few other expenses. Maybe someone it trading in a paid off vehicle or two.
Bottom line is that you don't know anyone else's financial situation and what they can or cannot afford.

 

[neririn]

Maybe someone has been saving up to buy it. Maybe someone has very few other expenses. Maybe someone it trading in a paid off vehicle or two.
Bottom line is that you don't know anyone else's financial situation and what they can or cannot afford.

Absolutely, curiosity mainly. Not intending to judge anyone or any action.

 

[holland]

Anyone know what happens if you sell your car/truck?

I'll be claiming the full 7500 this year on my 21 PHEV purchased in Sept 21. Do I need to keep it for a certain amount of time?

 

[sotek2345]

Anyone know what happens if you sell your car/truck?

I'll be claiming the full 7500 this year on my 21 PHEV purchased in Sept 21. Do I need to keep it for a certain amount of time?

What PHEV has a big enough battery for the full rebate?

 

[holland]

The rav4 prime is on the fed list for 7500

 

[Pioneer74]

What PHEV has a big enough battery for the full rebate?

Not a full rebate, but the Escape plug in gets $6850.

 

[shutterbug]

Anyone know what happens if you sell your car/truck?

I'll be claiming the full 7500 this year on my 21 PHEV purchased in Sept 21. Do I need to keep it for a certain amount of time?

No, as long as you planned to use it and not purchasing for resale.

 

[ShirBlackspots]

Forget about refund and witholding. Look at last year's 1040 line 24. If that number is more than $7,500, you're OK.

So, my line 24 shows $3010, I suppose that means I either get $0 or $3010 for the EV tax credit?

 

[TaxmanHog]

So, my line 24 shows $3010, I suppose that means I either get $0 or $3010 for the EV tax credit?

Taxes on lines 16+17 sum on line 18

Your maximum EV credit comes in on line 20 as $7500, it's added with line 19 if you have child credits for total credits on line 21

If the value of line 18 is less than line 21 then zero goes on line 22

The unused credit does not reduce taxes (if any) on line 23.

 

[corradoborg]

So, my line 24 shows $3010, I suppose that means I either get $0 or $3010 for the EV tax credit?

Correct, the current EV Credit is nonrefundable, which means it can only be deducted from taxes you actually owe (unlike a refundable credit, in which you get the whole amount regardless of what line 24 says). Line 24 is your tax liability, and therefore the maximum you can get back from the EV credit.

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