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$7500 tax credit debate/discussion

Discussion in 'Model S' started by DavidM, Jun 12, 2012.

  1. DavidM

    DavidM P2624, Delivered

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    One thing that nobody mentioned yet on this thread. I would not assume that the $7,500 credit will be available to customers who take delivery in 2013. Right now, we know for sure that it is available for purchases in 2012. But 2013 is not guarantee. It's an election year too, and the challenger's pick for energy advisor is a billionaire oil man. Draw your own conclusions.
     
  2. daniel

    daniel Active Member

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    #2 daniel, Jun 12, 2012
    Last edited by a moderator: Jun 14, 2012
    [mod note: split posting between two threads - this was originally posted here.]

    I've always said it does not make sense to give a $7,500 tax break to people who can afford a $50,000 car. And worse to give it to someone who can afford a $70,000 or $100,000 car. I'll take whatever they'll give me, and I was delighted with the $7,500 tax break on my Roadster (and no sales tax on new EV purchases in my state, which amounted to about $8,000 for my car) but giving money to rich people makes no sense. We all think we're entitled to perks for being EV pioneers and early adopters, but society would benefit more from spending that money on public chargers, or education, or battery research.
     
  3. ElSupreme

    ElSupreme Model S 03182

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    I'm really hoping for the $7,500 credit. It will still make this car expensive. I will be able to pay for it either way. But if the credits last I'll be getting $7,500 from the Feds, and $5,000 from Georgia. And I would put all of that down towards a new kitchen, or a ground source (geo-thermal for those non-picky non-engineer types) heat pump for my house. Upgraded insulation is going in this summer. And maybe windows after I pay off my car loan :wink:.
     
  4. jomo25

    jomo25 P4398

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    If only that's where the money would go.
     
  5. Bardlebee

    Bardlebee Member

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    You make a very valid point and I didn't think of it like that. Though I do wish they would push for more EV tech and I suppose that was just my reaction to taking the support away.
     
  6. Lloyd

    Lloyd Active Member

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    One thing that everyone should consider when deciding to take delivery this year. Make sure that you will have at least a $7,500 federal tax liability. If you do not in 2012 you may want to delay delivery until 2013 or another year to be able to take advantage of the credit.
     
  7. daniel

    daniel Active Member

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    Yep. The credit only goes to people rich enough to have that much tax liability. Someone who makes the stretch to buy an EV but has less than $7,500 tax liability, doesn't get the full benefit. That's our legislators at work: making sure poor folks don't benefit from programs intended to help the rich. I'd have bought my Roadster even without the tax credit, so the government just gave me $7,500 for nothing. (Or about $15,500 if you include my state's sales tax exemption.) I'm happy to get it, but poor folks have a right to be angry about it. I'm not in the top 1%, but the basic idea applies. I got that money because I'm rich enough that I don't need it.
     
  8. todd6678

    todd6678 Member

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    So to mitigate the tax issue, one quick remedy is change your W2 if need be, to have 0 dependents. You will receive more cash in your weekly paycheck (or pay less if you own your own business) thereby owing the government more money at the end of the year. You then get to subtract the full amount...if you're making enough.

    I'd be interested in a poll showing how many people are actually cancelling, however I'm guessing that the large majority is just deferring, otherwise they probably wouldn't be here anymore.
     
  9. Lloyd

    Lloyd Active Member

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    Todd, you did not understand,,,,, If your net tax liability to the feds is not at least $7500 regardless of witholding you will not get the benefit of the credit.
     
  10. onlinespending

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    That would be highly unlikely for someone able to afford this car, as your income would need to be extremely low to owe less than $7500 to the IRS. That would really only apply to those that are sitting on a large savings but were out of work much of this year.
     
  11. todd6678

    todd6678 Member

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    No, I did. That's why I said "if you're making enough"
     
  12. jomo25

    jomo25 P4398

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    Todd, you're logic as stated is flawed. It matter not at all how much you deduct out of your weekly paycheck via withholding. It only matters how much you make in total and your total tax owed for the year. Not net of your withholding. If that's what you meant, as you try to indicate in the subsequent post, then you shouldn't have said anything about the withholding amount. It isn't relevant at all.
     
  13. Lloyd

    Lloyd Active Member

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    Well, I make pleanty, but I have a business loss from years ago that leaves me with no net tax liability to the Feds. California does not allow you to carry forward any loss! I will not get the benefit of the credit.
     
  14. gg_got_a_tesla

    gg_got_a_tesla Model S: VIN P65513, Model 3 Res Holder

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    This might help: A $7,500 Federal Tax Credit? Not for Joe Sixpack - Consumer Guide Automotive

    Back on topic, is Sunset Red worth waiting for?! Looking forward to the Fremont event (if I get an invite) or atleast pics to see how that looks. If early enough in 2013 (say, February at the latest), I'll promptly go for standard coil suspension too and push my (60 kWh) delivery out from November - that'd also be 3 years from when I put in a deposit!
     
  15. todd6678

    todd6678 Member

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    Jomo25 my logic is spot on. I said, and I quote again, "If you're make enough". Implying you have to make enough to withhold. 7.5k That would be, just a guess, 45k a year?

    Sorry if the doesn't make sense to you.
     
  16. onlinespending

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    can you delay claiming the loss to offset gains in a future year? This way you take the EV tax credit this year instead of offsetting your prior losses.
     
  17. jomo25

    jomo25 P4398

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    With no $7,500 credit, could you still afford to buy?
    Suggest you read the whole thread. Kroneal and Transl8r spell it out.
     
  18. todd6678

    todd6678 Member

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  19. todd6678

    todd6678 Member

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    kroneal
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    Trnsl8r is right. Total tax before payments or withholding needs to be greater than $7,500 to get the full credit. I won't even get into the credit ordering rules. Consult your tax advisor.

    As I stated, there is only a credit and no refund. You will not receive a check from the government for any amount over what you tax liability may be.
     
  20. jomo25

    jomo25 P4398

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    Holy cow, you just don't get it. I agree and have clearly stated I agree that you won't get a refund if 7500 is over your tax liability. What you don't get is that the tax liability is not affected in any way shape or form by your withholding as your original message implies.

    Answer this simple scenario:
    My income is 80K.
    My taxes owed for the year as calculated on my 1040 is 26K prior to claiming the EV credit.
    I withheld $1K as part of my paycheck every 2 weeks during the year.
    When I file my taxes and claim the EV credit. Will I get $7500 check from the Treasury?

    The answer is YES.
     

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