Tax credit

[garygid]

Having dependent childern would reduce your tax liability, so it WOULD matter.

 

[Desertstraw]

Isn't it ironic that if you have children, it increases the cost to you of a Nissan Leaf? Your lower income tax because of your children reduces your tax credit.

A tax credit or rebate costs the government the same amount of money. If you want to promote sales, you to make something affordable to those who can't afford it. A rebate does not do this.

 

[LEAFfan]

Isn't it ironic that if you have children, it increases the cost to you of a Nissan Leaf? Your lower income tax because of your children reduces your tax credit.

A tax credit or rebate costs the government the same amount of money. If you want to promote sales, you to make something affordable to those who can't afford it. A rebate does not do this.

No, actually a tax credit will save the Government money! If they gave a Rebate, EVERYONE could get it by buying the car. But with a tax credit, very few people will be able to get the full amount by purchasing.

 

[Gonewild]

Having dependent childern would reduce your tax liability, so it WOULD matter.

No what I mean is you don't pay more in taxes. Even with children you get more back but you did not pay more. right?

 

[hodad66]

Desertstraw is aptly named as he enjoys building
strawmen. This is the cheapest, normal operating
EV yet.... so what's the problem. If there were
no $7500 adjustment to the lease I wouldn't even
be in the market.

 

[garygid]

Some are confusing paying and owing taxes with your tax liability.

Depending upon your income, interest, dividends, deductions, dependents, and a few other "small" factors, you calculate a tax liability on your tax forms.

This "liability" amount is what you would owe for the tax year if you had not made any "tax payments". However most of us do make "payments" during the year, typically payroll withholding or estimated tax paynents.

So, with our filing of the tax forms, we send in more if we have not paid enough, or ask for a refund if we have decided to be generous and gave the government more than we needed to give.

So, if your liability is $6000 and you "paid" $502 monthly (in payroll deductions), you would have paid $6024, and be due a $24 refund. With the LEAF tax credit, you would get an additional $6000 back.

With a "liability" of $10,000 you might have paid $1000 per month, and be due a $2000 refund. With the LEAF tax credit, you would get an additional $7500 back, "refunding" some of the taxes you owed (and already paid).

With a $3000 tax liability and only $1000 in payments, you would still owe $2000 in taxes. But, the LEAF tax credit for you would equal your tax liability ($3000), and it would pay the $2000 you owe, and you would get a $1000 refund (the tax that you already paid).

 

[LEAFfan]

Some are confusing paying and owing taxes with your tax liability.

Depending upon your income, interest, dividends, deductions, dependents, and a few other "small" factors, you calculate a tax liability on your tax forms.

This "liability" amount is what you would owe for the tax year if you had not made any "tax payments". However most of us do make "payments" during the year, typically payroll withholding or estimated tax paynents.
So, with our filing of the tax forms, we send in more if we have not paid enough, or ask for a refund if we have decided to be generous and gave the government more than we needed to give.
So, if your liability is $6000 and you "paid" $502 monthly (in payroll deductions), you would have paid $6024, and be due a $24 refund. With the LEAF tax credit, you would get an additional $6000 back.
With a "liability" of $10,000 you might have paid $1000 per month, and be due a $2000 refund. With the LEAF tax credit, you would get an additional $7500 back, "refunding" some of the taxes you owed (and already paid).
With a $3000 tax liability and only $1000 in payments, you would still owe $2000 in taxes. But, the LEAF tax credit for you would equal your tax liability ($3000), and it would pay the $2000 you owe, and you would get a $1000 refund (the tax that you already paid).

Someone here made it very simple. He said just look at line 60 on your 1040 tax form. I can't remember what line for 1040A.

 

[Gonewild]

Some are confusing paying and owing taxes with your tax liability.

Depending upon your income, interest, dividends, deductions, dependents, and a few other "small" factors, you calculate a tax liability on your tax forms.

This "liability" amount is what you would owe for the tax year if you had not made any "tax payments". However most of us do make "payments" during the year, typically payroll withholding or estimated tax paynents.
So, with our filing of the tax forms, we send in more if we have not paid enough, or ask for a refund if we have decided to be generous and gave the government more than we needed to give.
So, if your liability is $6000 and you "paid" $502 monthly (in payroll deductions), you would have paid $6024, and be due a $24 refund. With the LEAF tax credit, you would get an additional $6000 back.
With a "liability" of $10,000 you might have paid $1000 per month, and be due a $2000 refund. With the LEAF tax credit, you would get an additional $7500 back, "refunding" some of the taxes you owed (and already paid).
With a $3000 tax liability and only $1000 in payments, you would still owe $2000 in taxes. But, the LEAF tax credit for you would equal your tax liability ($3000), and it would pay the $2000 you owe, and you would get a $1000 refund (the tax that you already paid).

Someone here made it very simple. He said just look at line 60 on your 1040 tax form. I can't remember what line for 1040A.

Lint 37 I believe.

 

[planet4ever]

Here is a suggestion. Call your representatives and ask them to change the tax credit to a rebate.

That is what the new Senate bill does - though I don't know whether that has made it to the energy bill on the floor.

Are you referring to S.3442: Electric Vehicle Deployment Act of 2010? If so, it doesn't change the tax credit to a rebate, but it does make it "refundable". i.e. you could get the money back at income tax time even if it was more than the taxes you paid.

However, there is a huge catch: I would, at least for the first five years, apply only in from five to fifteen special "deployment communities".

 

[EVDRIVER]

Isn't it ironic that if you have children, it increases the cost to you of a Nissan Leaf? Your lower income tax because of your children reduces your tax credit.

A tax credit or rebate costs the government the same amount of money. If you want to promote sales, you to make something affordable to those who can't afford it. A rebate does not do this.

If it were a rebate it would not be funded as a tax credit, it is funded by a tax liability so it is not a handout or paid without having offset funds that would otherwise not be there. In other words, it's paid for by revenue not given out as a handout. It would be better if it were able to carry forward though for those who pay less per year.

 

[Gonewild]

apply only in from five to fifteen special "deployment communities".


Is that me in AZ?

 

[evnow]

Are you referring to S.3442: Electric Vehicle Deployment Act of 2010?

That one got merged to this.

http://www.govtrack.us/congress/billtext.xpd?bill=s111-3495

Text of S. 3495: Promoting Electric Vehicles Act of 2010

But I don't think this is going ahead either. Parts of this will be merged with the slimmed down energy bill on the floor (after killing the cap & trade aspects) - which basically favors NG vehicles (more than $4B) compared to some $400M for EVs. I can't get the language of that bill anywhere ...

ps : Ok, here it is. See title XXI.

http://democrats.senate.gov/pdfs/The_Clean_Energy_Jobs_and_Oil_Company_Accountability_Act_of_2010.pdf

Lopsided Energy Bill: $4 Billion for Natural Gas Vehicles, $400 Million for EVs

http://blogs.edmunds.com/greencaradvisor/2010/07/lopsided-energy-bill-4-billion-for-natural-gas-vehicles-400-million-for-evs.html

 

[AndyH]

Isn't it ironic that if you have children, it increases the cost to you of a Nissan Leaf? Your lower income tax because of your children reduces your tax credit.

A tax credit or rebate costs the government the same amount of money. If you want to promote sales, you to make something affordable to those who can't afford it. A rebate does not do this.

I really feel for you, Desertstraw. It's difficult to connect the dots when all the dots aren't on the table.

Let's start here:

The legal right of a taxpayer to decrease the amount of what would otherwise by his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.
U.S. Suprems Court (Gregory v. Helvering, 293 U.S. 465)

Because the government uses various rules, changes, and adjustments to promote behaviors they want to promote, and because different people can choose whether to participate in or opt-out of any/all of those behaviors, there is no 'single' tax liability that fits all.

We are all free to find legal ways to use the tax code to our advantage. If one does that, and changes their behavior in order to make the tax system work for them, then they might not really care about the $7500 EV credit, because they've saved more than that over the years by reducing their tax liability.

Put another way: Welcome to Vegas! Rule number 1 is that on average the house always wins. We can choose to throw money away and justify it as 'entertainment', but we're just a free to learn how to play blackjack and do our part to keep the 'house' in check.

 

[smkettner]

OK so if a person cannot fully utilize the potential $7500 Leaf credit... what about the 50% tax credit for the charging system?
I might need to get the Leaf this year and the charge system next year.

In the mean time I need to defer deductions to pay more tax in 2010 unless the purchase is delayed then accelerate deductions to pay more tax next year. Jeezo what a pain.

 

[planet4ever]

The way Congress is going you may not have a charging system credit at all next year because the current program expires December 31. Furthermore, unless Nissan has already told you you can order your Leaf in August, I doubt if you will be able to get it this year. So I think you should reverse your tax credit plan.

 

[Dav]

In the mean time I need to defer deductions to pay more tax in 2010

I hate trying to figure out how this is all going to impact my taxes and deductions! Especially without knowing when I'll actually take possession!

 

[smkettner]

Easiest for most is to prepay the mortgage one month and property taxes second installment one year and not the next to spike your tax liability. Timing of business deductions may also help. Ask your tax advisor if you are not able to easily get the full $7500. It might pay to take possession Jan 1st if you need to prepay stuff in 2010 to spike your taxes in 2011.

I am surprized any unused tax credit would not roll to the next year if not fully utilized. All the talk is that it applies only to the year of purchase.

 

[Gonewild]

Easiest for most is to prepay the mortgage one month and property taxes second installment one year and not the next to spike your tax liability. Timing of business deductions may also help. Ask your tax advisor if you are not able to easily get the full $7500. It might pay to take possession Jan 1st if you need to prepay stuff in 2010 to spike your taxes in 2011.

I am surprized any unused tax credit would not roll to the next year if not fully utilized. All the talk is that it applies only to the year of purchase.

Ya solar that I just got roles over but they want us to buy electric cars and do not do the same? a shame

 

[LEAFfan]

Easiest for most is to prepay the mortgage one month and property taxes second installment one year and not the next to spike your tax liability. Timing of business deductions may also help. Ask your tax advisor if you are not able to easily get the full $7500. It might pay to take possession Jan 1st if you need to prepay stuff in 2010 to spike your taxes in 2011.

I am surprized any unused tax credit would not roll to the next year if not fully utilized. All the talk is that it applies only to the year of purchase.

Yep, that's correct. The $7500 fed tax credit is a one shot deal, no rollover.

 

[mwalsh]

Especially without knowing when I'll actually take possession!

That's why I hedged my bets and got solar moving this year too. Since the solar tax credit does roll-over I figured I could take some this year and some in 2012, if I got my car next year. Or I could take the car this year and the solar credit for 2011 and 2012.