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Accountant claiming we don't qualify for tax credit??

Discussion in 'Model X' started by DrivingTheFuture, Jan 6, 2017.

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  1. DrivingTheFuture

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    We pay ourselves thru an LLC, and our accountant is claiming since our income was higher in 2016 than 2015 we don't qualify and still owe all our taxes. Is she on something? Reps at our local store say it is not income based, plus I would assume most buyers that can afford a new Tesla also recently had increasing income. Any help? Should I call Tesla corporate and is our tax preparer misunderstanding the credit? She is with a big reputable firm and she used to work for the IRS for 20 years...
     
  2. CmdrThor

    CmdrThor Active Member

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    This is why I do not use a paid preparer. I'm fairly certain the credit is not even subject to AMT limitations. I would do the taxes yourself or get someone different.
     
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  3. kort677

    kort677 Banned

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    find a better CPA, I don't know your details but the reasoning your giving is not correct.
     
  4. deonb

    deonb Supporting Member

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    That seems like something got lost in translation. I don't know of any tax benefit that goes away simply because you earned more in year x than in year x - 1.

    I've taken the EV credit twice, once on a W2 and once on a K1 through an LLC - neither was a problem.
     
  5. RacerX

    RacerX 3x F1 World Champion #44

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    I'm not a tax professional!!!
    This is a federal credit. So it should decrease your tax burden dollar for dollar. If you owe more than the $7,500 then you still have to pay the taxes that you owe.
    So overall if you were to owe for this tax year $10,500 then you should only have to pay $3000 in taxes.
    This of course is a simple example for a complicated IRS tax issue.
    Good luck and get a second opinion.
     
  6. Tam

    Tam Active Member

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    IRS form is very easy to use. You don't need to pay someone who incorrectly says that you can't claim Federal EV tax credit because you are richer in 2016:

    Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit

    It's the opposite. If you are poorer in 2016 and you owe zero dollars to IRS, IRS won't issue you a check of $7,500.

    It's a credit that you can use against to your tax liability.
     
  7. Dstrohl

    Dstrohl Member

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    Have her work through the form with you... and show you the relevant documents.

    My research shows that there is no income criteria for it... perhaps though she is trying to say something else and not saying it correctly (like maybe she means that you don't get any money back because your income increased and you are in a new bracket... but without the credit you would have owed 7500 or something?)

    Also, if you purchased the car through the LLC, that might make a difference as well.
     
  8. TexasEV

    TexasEV Well-Known Member

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    No reason to call Tesla, they're not going to give you tax advice. The tax credit has nothing to do with income, other than you need enough income to have a tax liability of $7500 to get the credit. It's not a refundable credit. Perhaps the LLC complicates this somehow? You may want to get a second opinion from another accountant.
     
  9. DrivingTheFuture

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    We purchased it through the LLC and that's the only thing I can think of that might change something...
     
  10. SabrToothSqrl

    SabrToothSqrl Active Member

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    Is the "hummer loophole" thing still a thing? Over 6,000 lbs right?
     
  11. Az_Rael

    Az_Rael Supporting Member

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    It's not income based, and not subject to the AMT, however, you might be getting caught up in Section II of the form https://www.irs.gov/pub/irs-pdf/f8936.pdf since you bought it with the LLC. That is not something most of us deal with, so a second opinion by a CPA is what I would do.
     
  12. Tam

    Tam Active Member

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    I don't see why LLC cannot qualify for tax credit.

    As stated before, if your LLC is poorer in 2016, incurs a loss, a negative income, thus has no tax liability then of course you cannot apply $7,500 for a refund check.

    But you said your LLC is richer than the previous year, that means your LLC's tax liability is even more than previous year, thus, it is more reason that your LLC should qualify.
     
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  13. DrivingTheFuture

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    Well this is embarrassing... Turns out my wife thought we were filing already, when we are actually just paying a quarterly estimate for last year. My CPA emailed and said we can get the credit when we file. Phew!
     
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  14. DrivingTheFuture

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    Mod feel free to delete this thread
     
  15. Tam

    Tam Active Member

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    Glad that you sought second opinions from amateurs for free :)
     
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  16. Tam

    Tam Active Member

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    There's nothing wrong with filing an amendment to get your $7,500 after the fact!
     
  17. Chopr147

    Chopr147 Active Member

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    I absolutely HATE the AMT! It's been hitting me hard for years now and totally has passed it's intended reasons. I believe 1973 it was added for wealthy w/ too many deductions that ended with them paying zero taxes. GET RID OF IT!!
    Ok rant over :)
     
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  18. jeffro01

    jeffro01 Active Member

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    Agreed. One. Hundred. Percent....

    The AMT has been a thorn in my side for a couple of years now...

    Jeff
     
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  19. gjunky

    gjunky Waiting for the Model ☰

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    Anyone going to file for section 179 (hummer tax)? We registered our X in my wife's LLC for that reason.
     

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