campfamily
Posts: 436
Joined: Tue Apr 21, 2015 8:07 am
Location: Southern California

Re: Tax credit

Sat Dec 30, 2017 7:59 am

Carbuff wrote:Simple question. If I always get a refund on my fed taxes, does that mean that the ev tax credit is useless to me?
No. What matters is whether your total tax liability was greater than $7500. You can have a tax liability and still get a refund, that just means you had more withheld during the year than what you owed (said differently, you gave the government a tax free loan).
GONE - 2015 FFE, Magnetic with leather interior, debadged & tinted
38,500 miles (since May 2015), average 246 Wh/mile

REPLACED WITH - 2018 Tesla Model3, LR RWD, Obsidian Black

triangles
Posts: 1051
Joined: Tue Aug 16, 2011 11:40 am
Location: Toledo, Ohio

Re: Tax credit

Mon Jan 01, 2018 4:08 pm

What campfamily said. it's how much you owe in federal taxes that counts. For example if you only owe $5,000 in Federal income tax then you only get $5,000 of the $7,500 credit and you lose out on the extra $2,500. It does not carry over to the next year. So in order to use the full credit you must owe at least $7,500 in federal income tax. How much withholding you've had from your paycheck have no bearing. For example if you owe $7,500 in federal tax and $8,000 was withheld from your paychecks you would simply apply the tax credit and get all of your $8,000 back that you so generously loaned interest free to uncle Sam.
Last edited by triangles on Wed Jan 03, 2018 7:13 am, edited 1 time in total.
2014 Blue Candy FFE
http://www.fuelly.com/car/ford/focus/2014/triangles/303811 (since this forum doesn't allow BBcode in sigs)

EVA
Posts: 874
Joined: Tue Aug 06, 2013 9:10 pm
Location: Chicago Area

Re: Tax credit

Tue Jan 02, 2018 11:48 am

Probably one of the most confusing things in the world to understand. We all think our tax bill is the amount of money we owe after we file our taxes. Hey I got a refund, so I didn't pay any taxes. Yipeee.

The reality - Triangles got it exactly right - the ideal situation is to have $0 due or $0 in refund when you file your taxes. You are making a free loan to the government if you get a refund every year. Actually the best way to be is to owe exactly $1 less than would get you a penalty for not having enough taxes withheld.

The original question has been answered - if you have a total tax liability of greater than $7,500, the full credit applies. And it applies for multiple cars in the same year, or multiple cars over many years.
2014 Platinum White FFE (Turning in mid Dec. 2016 25,000 miles)
2013 Ingot Silver FFE
2012 Titanium ICE Focus
2014 Tesla Model S 85

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