2011 TAX TIME Questions

[thankyouOB]

Let's assume that the CV rebate is taxable. I would think that for most of us, that taxable amount would be eaten up by the $7500 credit. (I didn't even use half of mine.) But then there is the state part that I can understand. So if you filed the fed w/o the $2500 CV and there is still alot of residue from the $7500 (as in my case), would you be concerned about an audit? I didn't include the $2500 but I have alot left over from the $7500 that it would matter anyway. Any thoughts?

i dont follow your question and inquiry:
you say assume that the CV rebate is taxable and you dont report it.
in that case, yes, I would worry about an audit because I did not report income.

making a mistake is OK. Not reporting income is not OK.
severe penalties can result, not just taxes owed and interest.

 

[vin944]

To clarify the inquiry: Would an audit that would result in no additional fed tax liability be resonable? And this is from an IRS perspective.

 

[SanDust]

To clarify the inquiry: Would an audit that would result in no additional fed tax liability be resonable? And this is from an IRS perspective.

As a practical matter if you haven't gotten a 1099 the rebate will never show up on the radar. In any event, the IRS rarely audits an entire return. It happens because the IRS does a certain number of complete audits in order to understand what people are doing, but that is just the luck of the draw. Normally what happens is that something triggers one or more questions and they audit that part of the return.

If what you're saying is that if you added the rebates as income then it wouldn't have changed your total tax because you had unused EV credits, then yes, this is what would happen if the IRS forced you to file an amended return. No worries.

 

[vin944]

Right I did not get a 1099 and this thread indicates very strongly that you had to pay 38K to get 2.5K back. So I did not include the 2.5K on my return but in the unlikely event that the 2.5K is in fact income I kinda wonder if they have some type of incentive check that would say, "Hey he didn't report 2.5K income but if he did he will owe us 35% (or so) of that." Or do they have a check that might say, "Hey he didn't report that 2.5K but it doesn't matter anyway so why bother to waste time and man hours to have him redo his tax form."

 

[WWBD]

What Planet4ever said. You subtract line 13 from line 12, not line 11! The $7500 remains untouched, assuming you paid enough tax to cover it. Nissan didn't lead anyone astray.

 

[planet4ever]

Right I did not get a 1099 and this thread indicates very strongly that you had to pay 38K to get 2.5K back. So I did not include the 2.5K on my return

I'm not understanding what you are saying at all, vin944, but it doesn't matter, assuming by "CV" you mean the rebate from the state of California. I got a verbal statement from the IRS that those rebates are not taxable and do not need to be reported as income. Essentially, as SanDust said, no 1099, no sweat.

Ray

 

[vin944]

Let me try to rephrase it a little bit. I am going to assume that most of us here will not use all of the $7500 credit (maybe not true for everyone). With that in mind, I'm going to change it around a little. And yes by CV I meant the 2.5K rebate.

OK lets say I donated $1K worth of stuff to Goodwill. And I put that on my taxes. Larger donations typically trigger audits. But because of my 7.5K credit, even if I didn't itemize the donations, my tax liability would not change.

Now would the IRS notice this situation or would they simply waste tax dollars to audit and do whatever they do to check my receipts. And I do have receipts.

Any better?

 

[thankyouOB]

Let me try to rephrase it a little bit. I am going to assume that most of us here will not use all of the $7500 credit (maybe not true for everyone). With that in mind, I'm going to change it around a little. And yes by CV I meant the 2.5K rebate.

OK lets say I donated $1K worth of stuff to Goodwill. And I put that on my taxes. Larger donations typically trigger audits. But because of my 7.5K credit, even if I didn't itemize the donations, my tax liability would not change.

Now would the IRS notice this situation or would they simply waste tax dollars to audit and do whatever they do to check my receipts. And I do have receipts.

Any better?

i havent looked at it in some months, but i recall that one pays $7500 in taxes to the feds way before you hit 70k as taxable income as a couple.
i am not sure that very many here with this car dont have 70k in taxable income.

OK, I looked it up:

2012 Federal Income Tax Brackets and Marginal Rates

Married individuals filing joint returns and surviving spouses
If Taxable Income Is:

Over $70,700 but not over $142,700
The Tax Is:
$9,735 plus 25% of the excess over $70,700

I dont see where that many of us would not have a tax liability that equals the credit of $7500.
of course you might have 20-30k in deductions and maybe more in some other offsets, including personal exemption.

 

[SanDust]

Now would the IRS notice this situation or would they simply waste tax dollars to audit and do whatever they do to check my receipts. And I do have receipts.

It doesn't work the way you're assuming it does. There is rarely such a thing as "an audit." Most of the time there is just one or two things they'd look at. For example, if there was a problem with deductions they'd ask to see your supporting evidence for the deductions. If they're not satisfied that the deductions qualified they'd disallow them and issue a deficiency based on how much tax you'd owe after the deductions are disallowed. At this point it would be up to you to file an amended return and claim the additional EV credit. They're not going to file an amended return for you. But you could and then the bottom line of your return would not change.

This wouldn't waste taxpayer dollars. What would waste taxpayer dollars would be to have someone go through an entire return every time they found a problem in one area.

In the case of the CV it's highly unlikely they'd identify it as an issue in the first place. The rebates are not likely to be income, there is no easy way of identifying which taxpayers got the rebate, and there aren't a lot of dollars at stake.

 

[planet4ever]

Let me try to rephrase it a little bit. I am going to assume that most of us here will not use all of the $7500 credit (maybe not true for everyone).

Like thankyouOB, I doubt that statement. You are saying that most of us have a total tax for the year (before credit) of less than $7,500. That means taxable income of less than $55,650 for a married couple and less than $45,500 for a single person. I expect that most people who can afford to buy or lease a LEAF have incomes well above that. Of course a few people may have very high legitimate deductions, but the standard deduction for a married couple is under $12K. Weird things can happen if you run your own business but for most of us itemizing isn't going to push deductions much over $20K. So, how many people with a gross monthly income down around $6K or less are going to figure they can blow 10% of it on a car payment? A few, of course, but that takes real commitment to the cause.

By the way, lest there be any confusion, we are talking about total tax, not extra tax that you might have to pay on April 15 if there was no tax credit. For most people, most of that total tax comes out of your paycheck before you ever see it.

Ray

 

[hellraiser79]

While i do realize that most of you who bought a Leaf are rich, it is possible to buy one making less than $35k a year. I did it with no problem and somehow how ill figure out a way to get my income up to about 70k this year to claim the whole $7500 credit. You are right that if you have at least 70k in income, you will owe at least $7500 in federal tax and thus be eligible for the whole $7500 credit.

 

[vin944]

No I actually don't make that much but the Leaf is something definitely not in the budget but something I had to have. I'm an Electrical guy, I've built electric bikes, I have electric weed eaters everything. I did max 401k and catchup so my liability was lower. I only used about a little less than half of the credit.

So back to the facts: I did not file the 2.5K with my taxes. I used TT. I checked website today and it says refund to be deposited the 15th. So it looks like it's goin thru.

 

[FairwoodRed]

I've been having big delays with the IRS this year, but I finally have some progress.

The IRS says that due to new software, they are taking up to 3 weeks to process returns. I efiled on 15Feb and it was accepted on 16Feb. Three days later they said it would be direct deposited on 29Feb. On 1Mar it still said 29Feb. I called the IRS and they did some digging and confirmed that I was still being processed. My date should update when the processing was complete.

Yesterday, my date updated to "A check will be mailed on 16Mar". I have no idea how I went from the same direct deposit I've used for years to a mailed check. But at least is it some progress.

By the way this year, thanks to the EV and PV credits, I am part of the 52% of Americans that paid no tax.

 

[dgpcolorado]

While i do realize that most of you who bought a Leaf are rich, it is possible to buy one making less than $35k a year. I did it with no problem and somehow how ill figure out a way to get my income up to about 70k this year to claim the whole $7500 credit. You are right that if you have at least 70k in income, you will owe at least $7500 in federal tax and thus be eligible for the whole $7500 credit.

I suppose most who buy a LEAF do have high incomes but I am another one who does not: I generally get by on $15,000-$20,000 a year, all of it from savings and investments (being retired but much too young for Social Security). To qualify for the full tax credit I had to drastically raise my income for the year by converting some of my regular IRAs to a Roth IRA.

It wasn't a very efficient strategy because it also raised my tax bracket, but it was better than nothing. [Leasing wasn't practical here since the very generous Colorado Tax Credit is reduced sharply when leasing.]

 

[DesertDenizen]

I am in the exact same boat as dgpcolorado. I have been wanting to reallocate towards more bonds and less stocks for quite a while. I put it off and did it in 2011 just to get the credit. For the first time since I was a non working child I had a federal liability of zero.

 

[davewill]

It wasn't a very efficient strategy because it also raised my tax bracket, but it was better than nothing. ...

Since you wouldn't have actually PAID any of the tax generated in the higher bracket, I don't see the issue.

 

[Venk]

Are other people tracking their refund in on the IRS website?
Mine keeps getting pushed back
Here is the link if any else wants to check.

https://sa1.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp" onclick="window.open(this.href);return false;



Venk

 

[TNleaf]

Are other people tracking their refund in on the IRS website?
Mine keeps getting pushed back
Here is the link if any else wants to check.

https://sa1.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp" onclick="window.open(this.href);return false;



Venk

Mine was originally supposed to be the 3rd week in Feb, then it got pushed back, and finally showed up the second week of March. I believe they are just slower than expected this year.

 

[thankyouOB]

thanks for the link, Venk!

 

[vin944]

Checked mine and it says due for deposit tomorrow the 15th. I did not include the 2.5K CV rebate. I will keep everyone posted.................