AMIRZA786

Some good news. I filed my taxes today, and I just barely qualified for the $7500 tax credit. A large portion of my compensation is RSU's (Restricted Stock Units), which nobody got last year due to some cut backs. On paper the IRS considers them as income, they are not really worth anything until I actually sell them on the market, but the Government finds a way to get it's piece . The tax form will be available for online filing on Feb 14th, and I'll get my $7500

AMIRZA786

Just to be clear on the above post, this is not free money taken out of other people's taxes. In other words, people who have no intention of buying an EV didn't fund my Tesla purchase. It's a non refundable tax credit that lowered my tax burden by $7500. I'm not getting it wired to my bank as cash, I'm not $7500 richer. And the government didn't hand Tesla $7500. I will be paying the government less money. I hope that clears things up

jrmckinley

I was actually going to ask for clarification on this as I've never looked into it. So it's just a $7,500 tax credit that comes off of the top line of your income. So basically if you're at a 30% federal tax bracket, you just saved yourself roughly $2,100 in taxes (30% x $7,500)..?

bitkahuna

iTrader: (20)

if you're paying $7500 less taxes, that's $7500 that doesn't go into govt revenue. no it doesn't come directly from someone else, and the govt may not need that $7500 specifically, and of course the govt runs on an obscene amount of borrowing anyway, but the system of incentives and penalties/taxes is supposed to reflect 'policies' to get the public to do what it wants. all things considered, your $7500 credit probably just contributes to the federal debt burden.

no, it's $7500 off your taxes owed (tax credit, not off taxed income). but what i don't get is if it's a so-called "non refundable" credit, i believe that if you owe say $2000 and have the $7500 credit, you won't get a $5500 refund

i guess the point is to end up with no tax liability to the irs after all taxes paid and credits.

https://turbotax.intuit.com/tax-tips...dits/L9gpESSU2

Mike728

Correct, if you're not over the income limits, it reduces your federal taxes by up to $7,500. If your total federal tax burden is less than that, you only get back up to what you paid in. Like Amirza, I get the full amount. This year it's an up-front credit of $7,500 with only the income limits to be concerned with. Meaning, you can get it even if you didn't pay enough in. They will only go after those that exceed the income limit.

The other incentive that I was hoping for, was the $1k back for having a level 2 charger installed. Unfortunately, they changed the rules in '23, so you need to either be living in a poverty zone, or a rural area, which I do not. My city gave me $500 back, but it was supposed to be $750. They ran out of money and pushed me into the '24 incentive. I also am required to pay $5/mo for 5 years into some pool that gets distributed to less fortunate families. Basically, I'm only getting $200 refunded. Almost wasn't worth the effort filling out the forms and jumping through the hoops.

swajames

Because I bought my truck in 2022 I got the credit on a truck which would have failed the MSRP test and despite me being a taxpayer who exceeded the impending income thresholds. I looked at this this way. I've paid huge amounts of tax over the years, so no one is going to make me feel bad about sneaking a one-time 7.5K reduction in my own tax bill.

Remember that roughly half the population pay no federal tax (the half that don't do pay other taxes). And federal tax collection in dollar terms is mainly funded by higher earners.

jrmckinley

Wow, that is certainly better than my (mis) understanding of it. That's awesome!

AMIRZA786

I feel ZERO bad about it. Millionaires and Billionaires have access to tax write-offs most don't even know exist. A ton of my income goes into taxes, this small tax credit barely breaks the surface. It's there, I took it with no regrets

AMIRZA786

While we are talking about the $7500 tax credit, I decided to use Intuit TurboTax this year instead of using a professional, and a tax professional is way better, which is why they are not cheap. When it comes to tax deductions, they only offer up the most common deductions, and you have to go digging for other deductions. I had to go searching for the EV tax credit forms, which are Form 8936 and 8936-A. I paid for the Premium Live assisted and had to speak with someone, but was finally able to file for the deduction. Had I not known about the EV credit, I could have easily missed it

jrmckinley

These things are put in place for a reason - and they're meant to be used. I'm glad you got to take advantage of it!

AMIRZA786

One of my brother in laws who is wealthy, pays a 17 percent tax rate, while I pay 24 percent. His net worth is easily 15x mine. Difference is, he has CPA's, lawyers and money managers while I have TurboTax

swajames

Might be worth remembering that so does the $7500 downpayment contribution on many EV lease deals. It's the same credit. Differences are simply in who files for it and that the manufacturer credit has no income, MSRP or sourcing restrictions.

bitkahuna

iTrader: (20)

just to be very clear, i was in no way implying you should feel bad. everyone should take every tax break they can.

our tax system is not only obscenely complex and inefficient, it also isn't even remotely fair. these days low earners not only pay no taxes, they get REFUNDS as well from tax credits. but that's a small matter, although big to those who need the money so i'm not blaming them. but the complexity is awful, so as you discovered actual accountants usually earn their pay over turbotax.

i haven't done my own tax return in forever. i don't have the interest, the skills, or the time. happy to pay someone qualified to do it.

AMIRZA786

In a dark way, I'm kind of glad it's complex and inefficient, because it you play your cards right, its easy to game the system

Mike728

I've been using Turbo Tax for years. I used to pay for a professional, but figured out it was just throwing money away. If you let TT guide you through the process, it will show you all deduction possibilities. If you tell it you want to do it yourself, you may miss some, as you seem to have done with the EV credit. I've never had the need to contact them for assistance.