Tax credit 2023 [The tax credit discussion thread]

[ucmndd]

Yeah, hopefully. I can wait.
But I keep on reading here about people sending messages to "their advisor". It's a general question, unrelated to the tax doc. How do you contact "your advisor"?

You don’t have an advisor any more after you’ve taken delivery. That’s a pre-sales thing.

 

[Midpack]

Yeah, still wondering in general how to submit a question or start a conversation.

That's by design. They tell owners to contact their Service Center. So text the SC rep #, any SC could reply, and I get reasonably quick replies that way. And it doesn't end after the sale IME unless you abuse it maybe (too many questions that are answered via other Tesla resources - owners guide, website, your account, the app, etc.). When I have questions, I look at all the above resources, and here, for an answer first.

 

[OCR1]

I would like to order a Model Y once the 2024 tax credit is in effect. Has anyone heard if Tesla will be ready to reduce the price of the vehicle by the tax credit starting January 1? There’s no information on the website about anything other than taking delivery by end of this year.

 

[mongo]

I would like to order a Model Y once the 2024 tax credit is in effect. Has anyone heard if Tesla will be ready to reduce the price of the vehicle by the tax credit starting January 1? There’s no information on the website about anything other than taking delivery by end of this year.

Tesla has registered for this system, so it's out of their hands.
Clarification: Tesla won't reduce the price; IRS/ Treasury will have a web portal where Tesla enters the buyer and vehicle information and gets a credit level response. Then they pass that money onto the buyer who can then use it as down payment. (or keep it, I think)

 

[JWhite65]

Hi all. Been looking for an answer to this, and have been hard-pressed to find it.

If I purchase a MYP (income over federal tax credit limit) and have my sibling on title (who in fact is under the income limit), can either she or I claim the $7500 federal credit?

I know that we can’t split the credit, but I haven’t found an answer as to whether I can claim it despite being above the income limit, or if she can

Thanks all!

This question is probably best asked to an accountant. If your income was under the tax credit limit last year, you can use your AGI from 2022 to qualify.
Also, I have read that this credit does not work the same as a rebate. If a person's tax burden is only $5,000, they won't get the full $7,500 credit.

 

[JWhite65]

Just checked today and it was on my tesla account > Documents > "IRA Clean Vehicles Credit Report"

When I called yesterday, I was first told it would show up in my documents, then told they would mail it to me. This gives me hope they will follow through.
When did you take delivery?

 

[mongo]

Hi all. Been looking for an answer to this, and have been hard-pressed to find it.

If I purchase a MYP (income over federal tax credit limit) and have my sibling on title (who in fact is under the income limit), can either she or I claim the $7500 federal credit?

I know that we can’t split the credit, but I haven’t found an answer as to whether I can claim it despite being above the income limit, or if she can

Thanks all!

You eant to be sure your sibling's Social Security Number is used by Tesla for the IRS report, then they claim it on their taxes.

Q11. Can the new clean vehicle credit be split between multiple owners? (added March 31, 2023)
A11. No. In certain instances, multiple taxpayers may purchase, place in service, and be titled as owners of a single vehicle. For example, a married couple that files separate tax returns may jointly purchase and take possession of a new clean vehicle that qualifies for the credit and both be titled as owners of the vehicle. However, only one taxpayer can claim the new clean vehicle credit per vehicle placed in service, and the credit may not be allocated or prorated between multiple taxpayers. In the case of married taxpayers filing jointly, either spouse may be identified as the owner claiming the new clean vehicle credit.

The name and taxpayer identification number of the owner claiming the credit new clean vehicle credit should be listed on the seller’s report. See Topic B FAQ 9. Accordingly, multiple owners of a new clean vehicle should inform the seller which owner will claim the new clean vehicle credit so that the seller can identify that taxpayer on the seller’s report. The credit would be allowed only on the tax return of the owner listed in the seller’s report

updated Dec 26th
Frequently asked questions about the New, Previously-Owned and Qualified Commercial Clean Vehicles Credit | Internal Revenue Service

 

[Midpack]

When I called yesterday, I was first told it would show up in my documents, then told they would mail it to me. This gives me hope they will follow through.
When did you take delivery?

I don’t know what order they’re issuing them, but it’s NOT by delivery date so that’s won’t help.

And yes it’s a tax CREDIT at the end of your return, the credit cannot exceed your tax liability. It’s not a refund, rebate or the like. If your total tax liability is $500, your credit is limited to $500 no matter what the car was eligible for (e.g. $7500).

 

[flixden]

"The Order agreement you received when you buy the vehicle will be your proof. You can find this in your app under your profile."

This is the response I got. Tesla has a grip on it, nothing to worry about. Lol.
Both statements in this response are wrong, as far as I know.

 

[ucmndd]

This is the response I got. Tesla has a grip on it, nothing to worry about. Lol.
Both statements in this response are wrong, as far as I know.

At least as wrong as bothering them with the question in the first place.

 

[PNWLeccy]

When I called yesterday, I was first told it would show up in my documents, then told they would mail it to me. This gives me hope they will follow through.
When did you take delivery?

Took delivery 12/16. Only checked yesterday so not sure when it first showed up since I didn't receive a notification or anything

 

[flixden]

You don’t have an advisor any more after you’ve taken delivery. That’s a pre-sales thing.

I don't think that's true.

 

[Alonzo]

I don't think that's true.

I think it depends on where you are. I never had a single person who I could call an advisor. Every time I communicated with Tesla, I talked, texted, or emailed with a different person. This is in Texas where they aren't allowed to sell directly to the customer. When I call the number for my nearest showroom or service center, I'm liable to get someone in Colorado or California or some place else.

Others from other States I have talked with say that they can call their local Tesla "dealer" and discuss their issues with the same person every time.

 

[Iron]

If someone's projected tax burden falls below the $7500 EV tax credit and they don't want to leave money on the table, what are some last minute ways to avoid doing that?

Obviously, decreasing your tax withholding is one way but we are talking last minute here, as the year is at an end.....

I know of one.... which is to move funds in your 401K to a Roth, which then gets taxed now, versus in the future when you can access it. I did that last month.

 

[mongo]

If someone's projected tax burden falls below the $7500 credit and they don't want to leave money on the table, what are some last minute ways to avoid doing that?

Obviously, decreasing your tax withholding is one way but we are talking last minute here, as the year is at an end.....

I know of one.... which is to move funds in your 401K to a Roth, which then gets taxed now, versus in the future when you can access it. I did that last month.

Withholding doesn't matter. That only impacts your tax due, not your tax liability.
Roth conversion is the easiest way to increase your tax liability. If you have gains on stock, you could sell some and then rebuy to reset your basis.

 

[Iron]

Withholding doesn't matter. That only impacts your tax due, not your tax liability.

If you have less tax withheld than what you actually owe, you're going to owe more at the end of the year and the credit would detract from that at filing. Not sure how you see it.

 

[Alonzo]

If you have less tax withheld than what you actually owe, you're going to owe more at the end of the year and the credit would detract from that at filing. Not sure how you see it.

Whether you are due the full $7,500 credit has nothing to do with how much you owe or refund at the end of the year. If your tax liability for the year exceeds $7,500, then you will get the full $7,500 credit.

For example, let's say you made $120,000 for the year. After deductions, you owe $10,000 in taxes (which exceeds $7,500). You had withheld during the year $9,000. Normally, you would have to pay $1,000 at tax time. However, this year you would get the $7,500 credit, so instead of paying $1,000, you would get a refund of $6,500.

 

[mongo]

If you have less tax withheld than what you actually owe, you're going to owe more at the end of the year and the credit would detract from that at filing. Not sure how you see it.

You mentioned "leaving money on the table", in my mind that meant not taking full advantage of the $7,500 credit as opposed to needing to wait until filing time to realize it. Especially since your example of Roth conversion increases total tax, but doesn't increase the post filing cash on hand.

 

[Midpack]

If you have less tax withheld than what you actually owe, you're going to owe more at the end of the year and the credit would detract from that at filing. Not sure how you see it.

Your tax liability has nothing to do with withholding (other than penalties if you under withhold). You are talking about tax refund vs amount you owe. Your credit is applied to your total tax, not at all related to withholding. If you owe $4000 in taxes for the year, you will get a $4000 EV tax credit on an eligible vehicle purchase. Doesn't matter if you withheld $3000, $5000, or any other amount.

 

[mongo]

Your tax liability has nothing to do with withholding (other than penalties if you under withhold). You are talking about tax refund vs amount you owe. Your credit is applied to your total tax, not at all related to withholding. If you owe $4000 in taxes for the year, you will get a $4000 EV tax credit on an eligible vehicle purchase. Doesn't matter if you withheld $3000, $5000, or any other amount.

Yah, but be careful with terminology, "OWE" on the 1040 is the outstanding amount the taxpayer hasn't paid yet, not the total tax from which the credit would be subtracted.