Timing of Federal Rebate: On order or receipt?

[swhang]

Hey everyone,

Quick question here.

My M3 is set to be delivered on Jan 2018.

That means, I'll most likely put in the order Q4 2017.

Does that mean I will qualify on my taxes, for the rebate for fiscal year 2017 or will it be 2018? That difference of 1-2 months means a difference of 1 year on the $7,500!

 

[jelloslug]

On receipt.

 

[Litzy]

Delivery of the vehicle.

 

[eSpiritIV]

On receipt.

He means, NO if you take delivery in 2018, the delivery date is considered the date in which you made the purchase for your taxes. You will have to wait a year to file your $7,500 tax credit for the 2018 tax year. Sad to say we are all in the same boat unless your lucky enough to get delivery in December 2017

 

[swhang]

Errgggh! Thanks for the quick replies everyone. I hope this is helpful for others.

I was hoping for us to use it for 2017 because those in the same boat will have put down $3,500 already.

$1,000 for preorder.
$2,500 to start the official process.

 

[kengchang]

Guys, you can increase your withholding during the year to claw back the $7500 or $3750 and get less refund when you file your tax.

 

[run-the-joules]

How, pray tell, are you narrowing to a single month when the delivery window provided is three months wide? Just picking one of those three and saying "It's set!"?

 

[kmngq]

Guys, you can increase your withholding during the year to claw back the $7500 or $3750 and get less refund when you file your tax.

thats pretty smart. get monthly installments up front instead of having to wait until early 2018.

 

[speedy]

Guys, you can increase your withholding during the year to claw back the $7500 or $3750 and get less refund when you file your tax.

I think you meant DECREASE your withholding in anticipation of a tax credit. I know many folks like to get a refund at tax time, but I don't see any reason to give Uncle Sam a tax free loan and always seek to withhold at about 95% of what I anticipate owing.... YMMV

 

[ItsNotAboutTheMoney]

There are two timing points:
- The tax year is based on the date you "put the car into service". So, once you have it and are driving it, the tax year is set.
- You can claim the credit once you become the owner by state law. That'll be the Title issue date. (Not when it arrives, but when the state has issued the title).

So, normally you'd claim the credit when you file, but _theoretically_ a long delay in the title issue could force you to file an amended return to claim the credit.

 

[kengchang]

I think you meant DECREASE your withholding in anticipation of a tax credit. I know many folks like to get a refund at tax time, but I don't see any reason to give Uncle Sam a tax free loan and always seek to withhold at about 95% of what I anticipate owing.... YMMV

Yes, you decrease the withholding but you increase the number of allowance on the W4 form. Sorry if I wasn't clear enough. There will be implication to your state tax due to higher allowance, consult with your tax guy.

 

[azred]

How, pray tell, are you narrowing to a single month when the delivery window provided is three months wide? Just picking one of those three and saying "It's set!"?

Unless OP works for Tesla, obviously the set for delivery in January comment is nonsense.

 

[BrokerDon]

I think you meant DECREASE your withholding in anticipation of a tax credit. I know many folks like to get a refund at tax time, but I don't see any reason to give Uncle Sam a tax free loan and always seek to withhold at about 95% of what I anticipate owing.... YMMV

That's similar to what we did when we took delivery of our Tesla in July 2015. Since our income is primarily 1099 and K-1 we simply reduced our estimated Federal income tax payments by $7,500. EASY... and eliminated waiting until March 2016 to apply our $7,500 credit to our 2015 tax return.