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Thread: Tax credit quest

  1. #1
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    Tax credit quest

    Hello everyone


    I'm new to the tesla world and in the early stages of deciding and ordering my tesla s. I'm sorry if this is in the wrong section but here is my question. I have been confused about if I would get an actual tax refund check of 7,500$ when tax season rolls around so I called my tax consultant and here is what he told me


    Example


    Income: $100,000 a year
    Taxes paid : $20,000 a year
    What the non refundable tax credit will do is change my total Income to $92,500 and in turn reduce the amount I owe the IRS to $18,500 so a refund of only $1,500 which is proportionate to what my income was reduced to. Any help or comments would be appreciated and thx!

  2. #2
    Model S 03182 ElSupreme's Avatar
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    It doesn't work like that. That is the description of a deduction. The EV $7,500 is a credit all of which goes to your bottom line.

    If you owe (either already paid, or yet to pay) more than $7500 in federal taxes over the year, you will get the full $7,500.

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  3. #3
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    That's what I was thinking what he described was more of a deduction then a credit so if I have paid $20k over the year I should get the full $7500 back as a refund. He would not listen to me and kept seeing it does not work like that, I'm thinking of working with someone else because it does not seem like he knows what he is doing.

  4. #4
    Junior Member rsampsonjr's Avatar
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    Yes, you should go with someone else to do your taxes. My CPA correctly listed it as a credit on 2013 taxes.
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  5. #5
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    Let the person know they should read the directions for IRS Form 8936 and tell them that their inability to understand these instructions is why you are picking someone else to file your taxes.

  6. #6
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    thanks guys i appreciate it, i have been on the fence with him for the last 2 years and i will def be making the switch.

  7. #7
    Member Gizmotoy's Avatar
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    Form 8936 is a little weird. It's easy to end up with $2500 instead of $7500 if you just work your way down the form instead of following the accompanying instructions.

    That said, there should be no confusion whatsoever between credit/deduction. That part is very clear.
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  8. #8
    Model S VIN P01924 AndyM's Avatar
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    I agree with the others. Even Turbo Tax gets this right. this is a credit against your tax burden, not a deduction to your income.
    Time to change your tax consultant.
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  9. #9
    Junior Member hughconn's Avatar
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    Got my taxes back today and the full $7,500 credit plus credit for installation of charging unit. Musky and I thank you Uncle Sam!
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  10. #10
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    Don't forget, you may be able to also take the sales tax paid as a deduction, which can amount to several thousand dollars, as well. If you itemize on Schedule A and take the deduction for state sales tax as opposed to state income tax, you can add the sales tax paid for the car to the default "Table Amount" that is based on your income.

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