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$7500 Credit and Adjusting Tax Withholding

Discussion in 'Model S: Ordering, Production, Delivery' started by andydoty, Feb 17, 2014.

  1. andydoty

    andydoty Member

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    So... I have an interesting question regarding taxes and the preparation thereof. I'm also wondering if anyone has done this. I ordered my Model S and will be picking it up in April. Woohoo!!!

    I know what the credit will be and how many weeks until the end of the year. Why couldn't I adjust my federal tax withholding by the credit divided by the remaining weeks in the year instead of taking a check from the IRS for $7500 sometime in 2014?

    For example, if I pick the car up in April and there, say, 34 weeks until December. I would divide the $7500 by 34 which would result in $220.59. Could I (or has anyone) adjust my federal tax withholding to 99 and specify the amount to be taken out (which would be the normal amount less $221). I would then return my deduction to the previous amount before next year.

    Make sense? My question is for either those that have already done this or have asked about it in the past. I also know that tax laws change throughout years as well. And, before anyone throws this at me, I have a CPA that does my taxes. I just can't believe I would be the first one to consider/do this.
     
  2. RandyS

    RandyS Fan of Elon

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    You could...I just filed and was able to get my $7500 credit applied but was not able to take the EVSE credit because of the TMT calculation...Just make sure that your calcs are right, or you might have to pay a penalty if you are under with drawn at the end of the year...
     
  3. markb1

    markb1 Active Member

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    It can sometimes be tricky to predict your tax liability, but if you can, great. Here's the IRS publication explaining how withholding is calculated, if you really want to be thorough:

    http://www.irs.gov/pub/irs-pdf/p15a.pdf
     
  4. ElSupreme

    ElSupreme Model S 03182

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    My employer wouldn't do that for me. They required me to put the number of deductions on my W-4. Trying to get it right was a nightmare. I just gave up and waited ~400 days to file my taxes!

    Put car 'into service' (read delivered) Jan 21 2013. Taxes filed Feb 15 2014. Whole lot of time without my $12.5k (7.5 fed, 5 state).\


    I am pretty stoked about this tax return.
     
  5. andydoty

    andydoty Member

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    Well, am I simplifying this too much? I already know what my weekly federal tax withholding, so if my math is correct, I should be able to reduce that by the credit divided by the remaining pay periods. I believe our accounting system does permit specifying an exact amount of federal taxes to be withheld.
     
  6. SummerlinModelS

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    Andy..what you propose is essentially what I am doing.
     
  7. bigdomer

    bigdomer Member

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    for those in ELsupremes situation, your employer cannot tell you how many exemptions you can claim. When I had a situation where I needed withholding stopped, I simply submitted a W-4 claiming 99 dependents. Yes, you can do this. From: a 20 year practicing CPA. Happy to field questions if need be.
     
  8. Cheerose

    Cheerose Member

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    Is 99 the "magic number" to have no tax withholding for Fed & State?
     
  9. swaltner

    swaltner Member

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  10. bigdomer

    bigdomer Member

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    Cheerose - swaltner's advice is the most technically correct. The short cut is going with 99 as it usually results in zero withholding. There is no risk because you are allowed to adjust your withholding via form w-4 per swaltner's recommendation above.
     
  11. andydoty

    andydoty Member

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    @Cheerose, in our particular case, 99 results in NO withholding and we can actually key in a figure. So essentially, I'm resetting to 0 then adding on the difference. I suppose I could essentially turn it off (set to 0) for a duration as well. Now, I just have to remember to put it back or I'm going to be in it!
     
  12. Plug Me In

    Plug Me In Member

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    On a somewhat parallel train of thought - Has anyone claimed the credit for the refueling infrastructure (Form 8911 I believe)? It looks like you should be able to claim a credit for 30% of the cost of HPWC, 14-50 outlet.
     
  13. Dwdnjck

    Dwdnjck Member

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    I don't pay estimated taxes at all. I simply pay the fine when a file my taxes. It isn't enough to worry about,around $150. I have been doing this for years.
     
  14. Bound466

    Bound466 Member

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    Yes, however I got caught as there is an AMT provision for this credit, and therefore cannot claim it because of that darn AMT. I didn't check thee form before making the assumption that I could count it as a deduction. Luckily it's not costing me a lot for that mistake.

    There is not an equivalent AMT provision for the $7500 credit, although there are other requirements such as you only can collect on the credit up to the amount of your tax bourdon. If it's greater than $7500 like most folks not retired yet, then you can collect the full $7500.

    Regarding changing one's withholding, that is the way to go. I did that last year, and it worked great. I do that normally anyways to dial in my taxes.
     

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