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Sold 27 day old 2016 Model S 75D AP HW2–Only 200 miles- $85k

Discussion in 'Tesla for Sale' started by eurek, Jan 25, 2017.

  1. SageBrush

    SageBrush 2018: Drain the Sewer

    Joined:
    May 7, 2015
    Messages:
    7,775
    Location:
    New Mexico
    #61 SageBrush, Feb 8, 2017
    Last edited: Feb 8, 2017
    I am neither a lawyer or a CPA, but I'll help you out here:

    A non-refundable credit cannot lower the tax liability below zero.
    Tax liability has nothing to do with the amount you owe the IRS at the end of the year ... unless you paid exactly zero tax payments during the year.

    Just in case this is just a case of mixing up terms rather than you not understanding the tax code, look at this snippet from Form 1040:

    Screen Shot 2017-02-08 at 8.43.42 AM.png

    Tax liability, known as 'Tax' on line 44, is the important number from which non-refundable tax credits are applied.

    Example:
    Your line 44 'Tax' is $7500
    You have non-refundable tax credits worth $7500 + 'Z'
    You have refundable tax credits worth 'Y'
    You have made $'X' in prepayments

    The IRS will send you a check for X+Y

    --
    Generic Example:
    Your line 44 'Tax' is 'T'
    You have non refundable tax credits worth 'NR'
    You have refundable tax credits worth 'R'
    You have made 'P' total pre payments

    (T - NR)* - R - P
    *if T - NR is negative, use zero
    If the expression is negative, a refund is issued for that absolute value amount. A positive number is the amount you still owe the IRS.

    Disclaimer: AMT may be the starting number to use instead of line 44.
     
    • Informative x 1
  2. hill

    hill Active Member

    Joined:
    Apr 21, 2015
    Messages:
    1,172
    Location:
    Lake Forest, CA
    I think you & i have the same understanding
    File your taxes easy, fast and affordable.
    and - that said - (dead horse) 'nuf said
    :)
    .
     

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