IRS weighs in on tax rebate, mostly bad news for Model Y

[gx9901]

Just saw the huge price cut while checking out the local inventory numbers. This is pretty wild. They are now lower than when I ordered in July, 2021.

This sucks for those who bought last year, but I think the Model Y is again a pretty good value and many LR configurations qualify for the tax credit for the next two months too so they are effectively $46k or so. Kind of nuts.

 

[ucmndd]

Just saw the huge price cut while checking out the local inventory numbers. This is pretty wild. They are now lower than when I ordered in July, 2021.

This sucks for those who bought last year, but I think the Model Y is again a pretty good value and many LR configurations qualify for the tax credit for the next two months too so they are effectively $46k or so. Kind of nuts.

It had to happen. I’m glad they ripped the band-aid off. This was the only solution that was ever on the table, despite the prognostications of the dreamers.

 

[gx9901]

It had to happen. I’m glad they ripped the band-aid off. This was the only solution that was ever on the table, despite the prognostications of the dreamers.

Yeah, I figured that Tesla must cut the price to avoid a glut of inventory at some point because it just doesn't add up. Hopefully not too many people who qualify for the tax credit bought a Model Y in the last 11 days. It's gotta hurt real bad for them. $20k is some real money.

Lately my wife has been lamenting the TSLA stock we have. I just told her to buckle up. LOL!

 

[Hiline]

new buyers want it at 55 plus tax credit...
already owners want to stay at 66k and have IRS increase the limit to 80k to preserve the resale value....

all new buyers simply waiting... unless thay are infactuated by model y and rich...

Hats off to you for correctly predicting the 55k price.

 

[randmness]

This is really excellence news.

Now I’m really curious if we’ll see more downward pressure on prices for other EVs? The price of the Mach E has to be considered nuts now, but I’m also curious if the ID4 will drop considerably.

 

[Snow Drift]

Yup, no demand problem here! Just a MASSIVE $13,000 price cut (plus $7500 tax credit!) because they think it’s the right thing to do!

View attachment 895064

Yup. That sucks, well it's good, but it sucks for my argument.

Also, my used MY is now a major mistake.

 

[nate704]

Most people will not get the tax credit since it is non-refundable credit,

 

[Snow Drift]

Most people will not get the tax credit since it is non-refundable credit,

What? Just about anyone who can afford a Tesla will qualify for the $7,500 credit from tax liability standpoint. If your AGI is above the limit, just lease and you'll get the credit applied to the lease numbers to lower your payment.

Please look up non-refundable credit. It's not what you think.

 

[DrGriz]

Most people will not get the tax credit since it is non-refundable credit,

Price cuts open up the possibility to many people who would not have bought otherwise, and who do qualify.

 

[nate704]

What? Just about anyone who can afford a Tesla will qualify for the $7,500 credit from tax liability standpoint. If your AGI is above the limit, just lease and you'll get the credit applied to the lease numbers to lower your payment.

Please look up non-refundable credit. It's not what you think.

Do most people lease or purchase? I never lease cars, so I have no idea.

 

[Snow Drift]

Do most people lease or purchase? I never lease cars, so I have no idea.

Most people lease luxury cars. Either way, $7,500 in Federal Total Tax liability is tiny. Just about everyone pays more than that in Federal taxes. So, if you want to buy the car, you will get $7,500 either as a check, or to reduce your tax liability due in April.

AGI is another topic.

 

[nate704]

Most people lease luxury cars. Either way, $7,500 in Federal Total Tax liability is tiny. Just about everyone pays more than that in Federal taxes. So, if you want to buy the car, you will get $7,500 either as a check, or to reduce your tax liability due in April.

AGI is another topic.

Most rich people owe more and pay taxes. Most low-mid class average people get tax returns. That's why I said most people will not get the credit.

 

[MP3Mike]

Most low-mid class average people get tax returns. That's why I said most people will not get the credit.

Getting a tax return doesn't mean anything. You can get the tax credit on top of a "tax return". (i.e. you don't understand how taxes work.)

 

[texas_star_TM3]

What? Just about anyone who can afford a Tesla will qualify for the $7,500 credit from tax liability standpoint. If your AGI is above the limit, just lease and you'll get the credit applied to the lease numbers to lower your payment.

Please look up non-refundable credit. It's not what you think.

no and no

individuals or households who can afford Tesla's are often above $150k / $300k income (which includes everything btw... not just paycheck but stock dividends etc) ... and no.... it can't be applied to a lease payment....

 

[nate704]

Getting a tax return doesn't mean anything. You can get the tax credit on top of a "tax return". (i.e. you don't understand how taxes work.)

what am I missing here?

 

[CHILLIBAJJI]

Most people will not get the tax credit since it is non-refundable credit,

that is not true. you have to understand the meaning of refundable tax credits first before saying that..

 

[MP3Mike]

what am I missing here?

View attachment 895224

That your source is bad? (Other than the last sentence, which is correct.)

Example: You had $8,500 withheld from your paychecks for Federal taxes over the year. While filing your taxes your total tax liability for the year comes to $7,600. Your normal refund would be $900, if you purchased a qualifying EV your tax refund would be $8,400. (i.e. The EV tax credit wasn't refunded, the majority of the taxes that were withheld from your check were refunded.)

 

[CHILLIBAJJI]

That your source is bad? (Other than the last sentence, which is correct.)

Example: You had $8,500 withheld from your paychecks for Federal taxes over the year. While filing your taxes your total tax liability for the year comes to $7,600. Your normal refund would be $900, if you purchased a qualifying EV your tax refund would be $8,400. (i.e. The EV tax credit wasn't refunded, the majority of the taxes that were withheld from your check were refunded.)

huh.. you said it... after EV the refund is 8400.. i.e one got EV credit.

 

[nate704]

Getting a tax return doesn't mean anything. You can get the tax credit on top of a "tax return". (i.e. you don't understand how taxes work.)

I am not a tax expert. I just use Turbo Tax for my tax stuff, so please educate me:
This is from IRS EV tax credit page:

 

[Snow Drift]

I am not a tax expert. I just use Turbo Tax for my tax stuff, so please educate me:
This is from IRS EV tax credit page:
View attachment 895239

Ok, this is common misconception about the EV Credit. The term has nothing to do with owing money in April, or your refund check from overpaying in taxes. The credit can be received in full, or partially:

If the EV credit max is $7,500: Non-Refundable Credit means if your Federal Total Tax liability was only $7,000, then you can only receive a $7,000 credit. The $500 credit that you could not utilize is GONE, it cannot be refunded to you. Some federal credits ARE refundable and any portion which you didn't utilize is sent to you regardless.

For my 2018 tax return, when buying my Model 3, I got a refund check for $12,000....$7,500 EV credit + $4,500 from the IRS from overpaying taxes.

no and no

individuals or households who can afford Tesla's are often above $150k / $300k income (which includes everything btw... not just paycheck but stock dividends etc) ... and no.... it can't be applied to a lease payment....

1) AGI has nothing to do with Total Tax liability. We are explaining how that works. AGI is a separate requirement. Anyone making $50k or more is probably paying $7,500+ in Federal total taxes.

2) Leases - If you lease an EV, the lease company gets the credit and they apply the benefit to you, the leasee. They either give it to you as downpayment cash (not Tesla) or they use the money to inflate your resale value (reduces depreciation), which lowers your monthly payment. So yes, you get a benefit as a leasee. AGI is not included for leases. You get the benefit no matter what,