@road kill grill. apologies. I read lots of mis information about the 200,000 cutoff other places and was mildly confused. none here tho. apologies.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Tax Credit Clarification
- Thread starter SmarterMotors
- Start date
Excellent - thanks for putting this together. I'm hopeful that the credit stays in tact and the Model 3 deliveries can benefit from it. If it doesn't, it will likely delay my preferences. If the Model 3 and tax credit weren't available, I would still get the car, but not until after having driven my current car for a few more years.
SageBrush
REJECT Fascism
Maybe.
My federal tax liability is zero, and I would like to keep it that way ;-)
This is actually one of the main reasons I keep considering a lease, for my first time ever.
Before someone suggests an IRA roll-over, that would not be a good choice for me due to the effect on my ObamaCare tax credit.
MiamiNole
Member
Well obviously retirees who aren't drawing income are more of an exception, although being only 34 myself I admit that I hadn't thought much about that group of Tesla buyers with regards to the tax credit. I'd bet that most people arguing for the case of qualifying for the full tax credit aren't really considering retirees when making their statement. But your point is well taken when discussing income of Tesla buyers as a whole.
I still wouldn't consider making $55k today as a huge income though, but that might be because of the industry I work in.
There are a number of options, depending on your financial situation, to create taxable gains. Some of them may be beneficial, such as realizing a large capital gain and repurchasing the stock(s) to reset your basis. You could create a taxable event, get credited for that event, and limit your future tax.
Surely any tax planner, CPA, or financial advisor can provide options, assuming one's financial situation is such that they have options.
If you're able to create a zero tax liability and still afford a Model 3, I get the feeling you've got options.
SageBrush
REJECT Fascism
Thanks for the thoughts, and you are right that I have options. None of them, however, dis-associate ObamaCare from an increased AGI.There are a number of options, depending on your financial situation, to create taxable gains. Some of them may be beneficial, such as realizing a large capital gain and repurchasing the stock(s) to reset your basis. You could create a taxable event, get credited for that event, and limit your future tax.
Surely any tax planner, CPA, or financial advisor can provide options, assuming one's financial situation is such that they have options.
At least that I am aware of. If I am wrong then please do tell!
Last edited:
SageBrush
REJECT Fascism
This is why I keep delimiting my remarks to people who pay for the car from salary.
Ah. Right, I overlooked that part of your message, probably because I have no experience with the credit. I just looked it up and it appears you are getting a credit due to your income management. I suppose the question (and not for me) would be whether the $7500 is more than the ObamaCare credit in a given year, and what that does for repayment of previous year credit. The latter seems to be a thing, but again - this is way over my head since I have no experience with it. Sorry for the oversight!
SageBrush
REJECT Fascism
The ObamaCare credit is on a sliding scale but for my purposes it would equal 15 cents less credit for each dollar of additional income. Curious, since that would be the additional income tax the EV credit nominally covers.
You are right that the ObamaCare credit may not have to be repaid in certain circumstances but that goes beyond my ability and willingness to game the system.
dgpcolorado
high altitude member
The other problem with the IRA conversion to Roth, which I did in 2011 to qualify for the tax credit on my LEAF, is that it boosts one's tax bracket, thus offsetting a large part of the tax credit.
The downside of leasing for a Coloradan is losing a large part of the state tax credit, soon to be a point-of-sale rebate. At some point, those of us with tiny incomes just have to make the best of it. I actually look forward to the days when tax credits won't skew decision making on EV purchases because it will make things simple. But, for the manufacturers who are EV laggards, that day is a long way off unless legislation changes the tax credit structure. Which seems unlikely to me.
dgpcolorado
high altitude member
I am in that same boat, at least until I reach Medicare age, so I understand the problem. One of the interesting aspects of retiring young — I retired at age 45 long ago — and living entirely on savings and investments.
Last edited:
dgpcolorado
high altitude member
It does depend on one's perspective. I worked in biotech and before that, academic research. My salary never got to $55k at any point. Even so, near the end I was saving one third to one half of gross income because I wanted out of the work-a-day world as soon as possible — it is helpful to have goals in life! I now do massive amounts of volunteer work and am much happier. It just doesn't pay very well...
Nobody knows what Donald Trump would do about anything, he's come out in favor and against just about everything. However, the tax credit is settled law at this point and there is no indication that anybody in Congress or the Executive Branch have any interest in revisiting it today or in the near future.
If the Model 3 becomes the major hit it might be and causes a stampede away from ICEs, the government may step in to do something to prop up the established car companies to help them survive the transition. But what exactly will be done is unknown. If there are incentives to buy more ICEs, the car companies will have less incentive to make the switch in a timely manner. If the government instead incentivizes car companies to build the battery factories and infrastructure to make EVs, that would probably work the best in the long term.
In any case, the power of the president to make and modify law is limited. There are things the president can do with executive orders, but to change tax policy requires action by Congress, which is currently broken.
If the Model 3 becomes the major hit it might be and causes a stampede away from ICEs, the government may step in to do something to prop up the established car companies to help them survive the transition. But what exactly will be done is unknown. If there are incentives to buy more ICEs, the car companies will have less incentive to make the switch in a timely manner. If the government instead incentivizes car companies to build the battery factories and infrastructure to make EVs, that would probably work the best in the long term.
In any case, the power of the president to make and modify law is limited. There are things the president can do with executive orders, but to change tax policy requires action by Congress, which is currently broken.
How many vehicles per calendar yr that an individual can claim the $7,500 Federal tax credit? is it only 1 per yr or 2 or else?
If I decide to purchase model S in summer 2017, there is possibility that my que for model 3 is move up. I live in California so there is regional priority also. I may decide still purchase the model 3 and resale it.
Thanks
If I decide to purchase model S in summer 2017, there is possibility that my que for model 3 is move up. I live in California so there is regional priority also. I may decide still purchase the model 3 and resale it.
Thanks
melindav
☰ 2018
If you have $15,000 in tax liability, you could claim two credits in one year, BUT the tax code states you own the vehicle(s) on Dec 31st of the year you are claiming the credit. So it you sold one part way thru the first year of ownership, you could not legally take the credit for that car.
Apologies if this has been answered in this thread already.
I understand that it's a bit of a gray area in terms of determining how much of the tax credit your model 3 reservation will receive since it depends on the delivery date of the car. But I'm wondering if I would for sure know the amount of the credit I will be receiving before finalizing my order in order to help budget all of the options a bit better? Is it standard procedure for Tesla to provide you with a fairly accurate ship date and tax credit projection during purchase finalization when you're much closer to being able to anticipate accurate ship dates?
Thanks!
I understand that it's a bit of a gray area in terms of determining how much of the tax credit your model 3 reservation will receive since it depends on the delivery date of the car. But I'm wondering if I would for sure know the amount of the credit I will be receiving before finalizing my order in order to help budget all of the options a bit better? Is it standard procedure for Tesla to provide you with a fairly accurate ship date and tax credit projection during purchase finalization when you're much closer to being able to anticipate accurate ship dates?
Thanks!
At this time no one knows for sure where they are as far as the 200,000 US sales are. With that being said, I would assume that there would be some sort of announcement as soon as they hit that number. Once that date is known everything else can be figured out based on when you receive your vehicle.
ccutrer
Active Member
Not currently. The tax credit is part of the configurator online, but when you get actual purchase documents it's not in there at all. That may change in the future with the Model 3, but I wouldn't count on it. Because as mentioned, being able to claim the credit is dependent on your own tax situation. I think the best we'll get is an announcement "we've delivered 200k cars in the US as of this date. The eligible tax credit for quarter X thru Y is $7,500, Z is $3,750, and W is $1,875", then it will be up to you to estimate your delivery date.
Similar threads
