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Tax credit

 
Old 07-11-2019, 02:55 PM
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Default Tax credit

If you normally come up even (no payment and no return) on taxes. Would the tax credit be a Tex return? Can someone explain to me please I want to make sure that Iíll get the tax return.


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Old 07-11-2019, 03:34 PM
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Originally Posted by KaDeTime View Post
If you normally come up even (no payment and no return) on taxes. Would the tax credit be a Tex return? Can someone explain to me please I want to make sure that Iíll get the tax return.


thank you in advance
Most likely your refund will go up by this amount. Letís say you make 100k and your taxes are 25k and your withholding is 26k. Normally youíd get a refund of 1k. With this credit, your taxes would be 17.5k (25 less the 7.5). Your withholding is still 26k so youíd get back 8.5k.
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Old 07-11-2019, 06:53 PM
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Originally Posted by TPilot View Post
Most likely your refund will go up by this amount. Letís say you make 100k and your taxes are 25k and your withholding is 26k. Normally youíd get a refund of 1k. With this credit, your taxes would be 17.5k (25 less the 7.5). Your withholding is still 26k so youíd get back 8.5k.

Perfect, thank you for this very easy to understand explanation.
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Old 07-12-2019, 05:35 PM
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Some people with high income AND expenses may not qualify for the entire credit, which is classified as Non-refundable. That means it is limited to the lesser of your Federal tax liability on line 15 of your 1040 or the $7,500. So if you have $100K in income and $40K in itemized deductions, your taxable income will be $60K and the tax liability on that (if married) will be about $6,800. Your credit will be only $6,800. You'll still get all your withholding back, which was always your money anyway, and you lose out on $700 of the credit.
So in this situation a person can do a couple of things to "increase" income. One is to move income into this year, which would otherwise be received in 2020. The other is to delay paying certain itemized deductions and cash-basis self-employment or real estate rental expenses, etc. into January.
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Old 07-12-2019, 05:47 PM
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Originally Posted by suttoni View Post
Some people with high income AND expenses may not qualify for the entire credit, which is classified as Non-refundable. That means it is limited to the lesser of your Federal tax liability on line 15 of your 1040 or the $7,500. So if you have $100K in income and $40K in itemized deductions, your taxable income will be $60K and the tax liability on that (if married) will be about $6,800. Your credit will be only $6,800. You'll still get all your withholding back, which was always your money anyway, and you lose out on $700 of the credit.
So in this situation a person can do a couple of things to "increase" income. One is to move income into this year, which would otherwise be received in 2020. The other is to delay paying certain itemized deductions and cash-basis self-employment or real estate rental expenses, etc. into January.

🙏 thanks
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Old 07-13-2019, 04:01 AM
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Anything special we need from the dealer to claim the tax credit?
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Old 07-13-2019, 04:12 AM
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All you need is the vin for Form 8936
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Old 07-13-2019, 09:47 AM
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Don't forget about a possible state credit. Colorado gives a $5,000.00 credit against its state tax. Here is a list of all state BEV credits: https://www.clippercreek.com/ev-incentives/
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Old 07-13-2019, 11:44 AM
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Originally Posted by suttoni View Post
Don't forget about a possible state credit. Colorado gives a $5,000.00 credit against its state tax. Here is a list of all state BEV credits: https://www.clippercreek.com/ev-incentives/
California gives $2,500 but the fund is currently exhausted. It's likely to get topped up though so don't hold off on submitting forms as you go into a waitlist and it's first come first served.
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