Took my MY off hold

[Rally]

I realized the $7,500 is a tax credit and not a tax refund. That's bogus. So, I removed the hold tonight around 8pm. I wanted to help ensure I get the $3,750 rebate so I selected an accelerated delivery vehicle which was the exact same as what I ordered and the same price. Delivery was updated to tomorrow (12/9) through Dec 16. That's crazy, and I know it can and probably will change. Trade in offer was pretty low, so I will sell my truck someplace else.

I don't know what the EDD would of been without choosing an expedited vehicle.

Ohh BTW, I received my VIN right away and it's a Fremont build.

 

[DeshE]

I always thought that the credit was against the tax liability and not against tax due at filing

For ex:
Total Tax Liability for a fiscal year: $30,000
Taxes withheld: $26,000
Tax credit applied at filing: -$7500 (Negative $7500)
Taxes due (or Refund) after applying tax credit: -$1500 (A refund).

So a tax credit is applied against the entire tax liability including any taxes already withheld/prepaid through the tax year and not just the remaining balance due.

Someone with deep insights into this and/or individual experience please tell me I am correct!

Disclaimer - I am no tax expert and don't claim to have any authority on this matter. So take this as speculation or simply my (incorrect?) understanding!

 

[DeshE]

Correction on the refund amount above. It should read as $3500 and $1500. (Math is not my strength either!)

 

[acpd]

I always thought that the credit was against the tax liability and not against tax due at filing

For ex:
Total Tax Liability for a fiscal year: $30,000
Taxes withheld: $26,000
Tax credit applied at filing: -$7500 (Negative $7500)
Taxes due (or Refund) after applying tax credit: -$1500 (A refund).

So a tax credit is applied against the entire tax liability including any taxes already withheld/prepaid through the tax year and not just the remaining balance due.

Someone with deep insights into this and/or individual experience please tell me I am correct!

Disclaimer - I am no tax expert and don't claim to have any authority on this matter. So take this as speculation or simply my (incorrect?) understanding!

You are correct

 

[Rally]

That could very well be the case. I've talked to someone I respect regarding taxes and investment, aand found several articles online, YT videos confirming you won't get a refund.



In the end the Tesla reduction is about $4,000 for me since there will be less sales tax. Discussed with the wife and we are taking to reduction. Especially since we don't know if MY will get the full $7,500 due to not knowing where they sourced their battery minerals.
I also claim single zero to avoid a tax penalty largely due to our state tax code.

Not saying anyone else should do the same, as everyone is in a different situation. It's worth confirming so you can make the choice that works best for you.

 

[sa012]

How did you initiate a accelerated delivery after you took off hold?

 

[Kokukenji]

I think that's the sweet spot. Placing an order and locking in a price prior to the latest price bump. Getting delivery in Dec with the $3750 off. Getting the upgraded suspension and minor upgrades to the Y. Seems like an overall W.

 

[Happy Hippo]

I think that's the sweet spot. Placing an order and locking in a price prior to the latest price bump. Getting delivery in Dec with the $3750 off. Getting the upgraded suspension and minor upgrades to the Y. Seems like an overall W.

What about this radar talk? Are you concern about that and just having the vision only?

 

[CHILLIBAJJI]

That could very well be the case. I've talked to someone I respect regarding taxes and investment, aand found several articles online, YT videos confirming you won't get a refund.



In the end the Tesla reduction is about $4,000 for me since there will be less sales tax. Discussed with the wife and we are taking to reduction. Especially since we don't know if MY will get the full $7,500 due to not knowing where they sourced their battery minerals.
I also claim single zero to avoid a tax penalty largely due to our state tax code.

Not saying anyone else should do the same, as everyone is in a different situation. It's worth confirming so you can make the choice that works best for you.

keep aside when you are paying taxes -- before.. with monthly paycheck/quarterly etc or at the fime of filing ---

if you paid taxes or due to pay taxes you get credit of that tax liability..

one thing they won't do is... if you paid nothing and won't have to pay anything, they won't pay you(still credit) to buy you a EV.

same disclaimer - not a tax expert/ not a tax advise..

 

[Kokukenji]

What about this radar talk? Are you concern about that and just having the vision only?

Fair question but nothing much I can do about it. One of those, we shall see what happens type of scenario. At the very least, you're probably looking at 1 year or so (Might even be too fast) for Tesla to figure out what they'll be doing with their fleet. We wanted the car now so it is what it is. However, for those can wait and have the patience to wait, that might be a better play if these open items are game breakers.

 

[ItsNotAboutTheMoney]

Drifting off topic

I always thought that the credit was against the tax liability and not against tax due at filing

For ex:
Total Tax Liability for a fiscal year: $30,000
Taxes withheld: $26,000
Tax credit applied at filing: -$7500 (Negative $7500)
Taxes due (or Refund) after applying tax credit: -$1500 (A refund).

So a tax credit is applied against the entire tax liability including any taxes already withheld/prepaid through the tax year and not just the remaining balance due.

Someone with deep insights into this and/or individual experience please tell me I am correct!

Disclaimer - I am no tax expert and don't claim to have any authority on this matter. So take this as speculation or simply my (incorrect?) understanding!

Well, yes, except your math is wrong and it would be a $3,500 refund. Plus for a non-refundable credit I'd list it:
Total Tax Liability for a fiscal year: $30,000
Tax credit applied at filing: -$7500 (Negative $7500)
Net Tax Liability: $22,500.
Taxes withheld: $26,000
Net due: -$3,500
So you can choose a refund of $3,500.

A non-refundable credit is non-refundable because it reduces liability, and that can't go below zero, so there's nothing to refund.
Refundable credits are refundable because it acts like a tax payment, so no matter your tax liability they "have to" pay you back the excess.

Disclaimer: I am not a CPA, and I'm not actually from here, but I like numbers and I just get the non-refundable/refundable concepts, even though I think they should have used a different name, because lots of people don't.

 

[bsmith922]

I had placed a hold as well, waiting for the tax credit, but with the new "referral credit" and some other circumstances, it made more sense to try and get it now. Removed the hold on 12/7. Got a VIN assigned on 12/8, and a scheduled delivery on 12/11.

Didn't do anything "special" besides remove the hold from the app, and then complete the financing terms and credit app via the app (for a lease). At first, it didn't show the $3,750 discount, but after about 30 minutes, it reflected that in the details of the final pricing / monthly payment.

 

[Zaphod314]

I always thought that the credit was against the tax liability and not against tax due at filing

For ex:
Total Tax Liability for a fiscal year: $30,000
Taxes withheld: $26,000
Tax credit applied at filing: -$7500 (Negative $7500)
Taxes due (or Refund) after applying tax credit: -$1500 (A refund).

So a tax credit is applied against the entire tax liability including any taxes already withheld/prepaid through the tax year and not just the remaining balance due.

Someone with deep insights into this and/or individual experience please tell me I am correct!

Disclaimer - I am no tax expert and don't claim to have any authority on this matter. So take this as speculation or simply my (incorrect?) understanding!

The $7,500 is a non-refundable credit and would be applied to the tax liability due when you file in the spring. In your example you would only get a $4,000 credit since it cannot create a tax refund. The only way to make the most of the credit is to reduce the amount of federal taxes withheld from your pay thus creating a larger tax liability.

 

[acpd]

The $7,500 is a non-refundable credit and would be applied to the tax liability due when you file in the spring. In your example you would only get a $4,000 credit since it cannot create a tax refund. The only way to make the most of the credit is to reduce the amount of federal taxes withheld from your pay thus creating a larger tax liability.

Interesting. Although doesn't make sense on why they would do that?

I would have guessed that as long as you have enough income to generate over $7500 tax, you should be good.

If this is true, they are punishing anyone who withheld more $$

 

[Bob2C]

What about this radar talk? Are you concern about that and just having the vision only?

The way I see it if your always waiting for the newest tech because of what's coming then you'll always be waiting for a car.. If you want it, buy it and enjoy... There is always something newer with more stuff as tech evolves....It's an amazing car. I love mine and with the updates only gets better..The deletion of the USS is small IMO and the radar if they do bring it back will probably be retrofitted on existing cars(I can assume there is a unused pigtail from when they removed it originally, possible plug and play)I think a lot of them removing it was supply chain issues just like the USS. Just my .02

 

[Zaphod314]

Interesting. Although doesn't make sense on why they would do that?

I would have guessed that as long as you have enough income to generate over $7500 tax, you should be good.

If this is true, they are punishing anyone who withheld more $$

Yep, the concept of non-refundable credits is pretty ridiculous. It essentially forces you to manipulate your withholdings in order to take full advantage of them. The government assumes most people don’t understand how taxes work so this is a way to say they’re offering something without actually having to pay for all of it.

 

[FultonMDUSA]

Yep, the concept of non-refundable credits is pretty ridiculous. It essentially forces you to manipulate your withholdings in order to take full advantage of them. The government assumes most people don’t understand how taxes work so this is a way to say they’re offering something without actually having to pay for all of it.

I don't think you are correct at all. If you Google "nonrefundable tax credits" you will clearly see lots of definitions from reputable sites that essentially state that a non-refundable tax credit just means you won't receive an amount in excess of your tax liability for the year, and is not related to how you've structured your tax payments in order to receive or not receive a tax refund.

 

[Windhammer]

This is all bad guidance on how non refundable tax credits work. @acpd initial understanding is correct, but with some caveats of the other deductions you might have.

 

[Zaphod314]

I don't think you are correct at all. If you Google "nonrefundable tax credits" you will clearly see lots of definitions from reputable sites that essentially state that a non-refundable tax credit just means you won't receive an amount in excess of your tax liability for the year, and is not related to how you've structured your tax payments in order to receive or not receive a tax refund.

I’m absolutely correct and I don’t need to google it. You can either take advice from someone who knows significantly more about it than you, or you can rely on your google research.

 

[hakunamattata]

I had placed a hold as well, waiting for the tax credit, but with the new "referral credit" and some other circumstances, it made more sense to try and get it now. Removed the hold on 12/7. Got a VIN assigned on 12/8, and a scheduled delivery on 12/11.

Didn't do anything "special" besides remove the hold from the app, and then complete the financing terms and credit app via the app (for a lease). At first, it didn't show the $3,750 discount, but after about 30 minutes, it reflected that in the details of the final pricing / monthly payment.

Congrats, I maybe wrong my guess is as part of the year end delivery Tesla has add inventory of vehicles at a large number of delivery centers, that is the reason we are getting delivery dates quickly. Hopefully they are not rejects