Exactly. I made 65k last year, I owed $4400 in taxes, so buying this car I will not get the $7500 credit but I can totally afford to buy it. Pending the sale of my Volvo.
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Exactly. I made 65k last year, I owed $4400 in taxes, so buying this car I will not get the $7500 credit but I can totally afford to buy it. Pending the sale of my Volvo.
Quick! Do something to increase your tax liability by, say, $3100. :smile:
(Actually, do this mean if you DON'T do something like that, you're literally "throwing away" $3100? As in, *why not* increase your liability by doing something you normally wouldn't do due to tax implications, but now you can because the net-net will be 0 taxes?)
ModelS1079
Member
All of these final bill calculations remind me, especially 48 hours after wiring a fine sum to Fremont, that buying a Tesla Model S is currently not for the meek-of-wallet. I believe I noted the same some time ago, but feeling more acutely today with my (loving) wife opening the envelope showing the wired amount, and looking at me as if... I'd just bought an electric car.
Agreed; examples: sell stocks or other appreciated assets; delay giving money to charities.
Just found this thread and wanted to mention a couple of thing that make sense in tax planning. If you are going to owe less than 7500 in taxes, you can harvest some gains to take advantage of the excess tax credit. For example if you own a mutual fund that has appreciated and you have $1000 in excess EV Credits, then sell enough shares of your mutual fund to increase your taxes by $1000. Then you take advantage of the full 7500 credit. And, you can purchase a similar fund right away and enjoy the increased basis or wait for the wash-rule period and buy the asset back. This is similar to how you harvest tax losses.
I am surprised the EV tax credit still exists. Even though it looks to be progressive (bigger % help to lower cost vehicles) it's really regressive because of the excess tax credit issue. "Only rich people can really benefit from it." A local news channel did a hatchet-job story about Tesla buyers and tax credits in Seattle. WA has a sales tax holiday on EVs as well so the fed and state benefits can be worth north of $17K for a Tesla.
As to the delivery, prep fees taxable. It depends on the state.
I am surprised the EV tax credit still exists. Even though it looks to be progressive (bigger % help to lower cost vehicles) it's really regressive because of the excess tax credit issue. "Only rich people can really benefit from it." A local news channel did a hatchet-job story about Tesla buyers and tax credits in Seattle. WA has a sales tax holiday on EVs as well so the fed and state benefits can be worth north of $17K for a Tesla.
As to the delivery, prep fees taxable. It depends on the state.
NotMandatory
Member
While it's certainly unfortunate that folks who don't owe at least $7,500 in taxes for the year can't take full advantage of the ACES Act Plug-in Electric Vehicle credit (which is $7,500 for a new Tesla, Leaf, or Volt), I don't think that means it is "regressive".
(Technically, I don't think a credit program can ever really be "regressive" by definition, since a tax is only "regressive" when it uses a rate that decreases as the taxpayer's income increases. And the tax credit calculation is effectively agnostic regarding the taxpayer's effective tax rate.)
Regardless of whether you think that's just "semantics", it is definitely a shame that the ACES Act PEV credit isn't also a refundable tax credit, which would mean any "excess" credit amount remaining after the owed tax for the year is reduced to $0 becomes available as a tax refund. I blame Congress for that...and the rest of the mess that is the US Tax Code.
But that doesn't mean the PEV credit is a "bad" idea or a bad program...and it's pretty much complete FUD to have it spun as "it only benefits rich people", especially when the way the available credit is calculated is completely divorced from the cost of the vehicle!One other tidbit on the ACES Act PEV tax credit that most people don't know (source):
As defined by the 2009 ACES Act, a PEV is a vehicle which draws propulsion energy from a traction battery with at least 4 kwh of capacity and uses an offboard source of energy to recharge such battery. The tax credit for new plug-in electric vehicles is worth $2,500 plus $417 for each kilowatt-hour of battery capacity over 4 kwh, and the portion of the credit determined by battery capacity cannot exceed $5,000. Therefore, the total amount of the credit allowed for a new PEV is $7,500.
The new qualified plug-in electric vehicle credit phases out for a PEV manufacturer over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles from that manufacturer have been sold for use in the United States.
So once Tesla has sold 200,000 qualifying vehicles (Roadster + Model S + Model X + ???), the credit will be reduced to 50% for the next two quarters then 25% for the two quarters after that...and then be gone for any and all Tesla models.
So it'll be interesting to see how close Tesla is to that 200,000 mark by the time the lower-cost Gen III Tesla is introduced!
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