The IRS Is Making It Way Too Confusing To Buy An EV With Tax Credits

[TaxmanHog]

Just making sure I dont have to mess with my withholdings to make sure I owe vs. receive a refund, but it seems as long as my tax bill is > these credits, im fine. ill receive back my overpayment.

Optimizing ES payments and Withholdings is another level of complexity, not for the faint of heart, consult a proper and capable financial tax advisor if this is over your head.

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[asianman35]

BTW.. each individuals tax picture can be vastly different.

Use an e-file application, accountant or CPA for projecting the impact of your 2023 taxes or input the information as it is on your 2022 filings currently in process to get an idea of how these credits will impact your situation.

oh yeah, messing with turbotax this year will help me predict next year, good idea. thanks!

 

[RickLightning]

Withholding and estimated taxes are irrelevant, all that matters is tax liability.

 

[Skidrowe]

The EV charger tax credit uses a different calculation to determine if you paid enough during the tax year. It takes in account other tax credits you are receiving as well. I was unable to take the EV charger credit with the $7500 credit from the vehicle. The same thing happened last year when I claimed my Kona EV. Turbo tax would zero the charger credit out as soon as I entered the $7500 vehicle credit. My wife and I for other reasons had to file separately and she was able to add the EV charger credit to her return. It wasn't a ton, I think it worked out to $200.

Tell me more about this. I'm experiencing the same thing with TurboTax right now. I had an installation cost of $2065 which should result in a tax credit of $620, but as soon as I added the $7500 EV tax credit, it zeroed out the Alternative Vehicle Refueling Property Credit. I pulled in one of the turbo tax help guys and he said I had the tax liability and that it shouldn't have been zeroed out. I'd like to understand what is causing me to no longer qualify for the $620 credit in my case.

 

[RickLightning]

Tell me more about this. I'm experiencing the same thing with TurboTax right now. I had an installation cost of $2065 which should result in a tax credit of $620, but as soon as I added the $7500 EV tax credit, it zeroed out the Alternative Vehicle Refueling Property Credit. I pulled in one of the turbo tax help guys and he said I had the tax liability and that it shouldn't have been zeroed out. I'd like to understand what is causing me to no longer qualify for the $620 credit in my case.

Go see if you're getting hit with the AMT (Alternative Minimum Tax). That will do it.

 

[jimfigler]

Tell me more about this. I'm experiencing the same thing with TurboTax right now. I had an installation cost of $2065 which should result in a tax credit of $620, but as soon as I added the $7500 EV tax credit, it zeroed out the Alternative Vehicle Refueling Property Credit. I pulled in one of the turbo tax help guys and he said I had the tax liability and that it shouldn't have been zeroed out. I'd like to understand what is causing me to no longer qualify for the $620 credit in my case.

Like Rick said, there is calculation of AMT and in that calculation it uses something called tentative minimum tax. Look at the IRS instruction sheet for refueling credit form. It has more to do than just tax liability. I definitely had more than $200 of tax liability to claim it but I couldn’t when the vehicle $7500 was included. It’s a strange issue

 

[TaxmanHog]

Withholding and estimated taxes are irrelevant, all that matters is tax liability.

Not disagreeing with the point, but most folks think about the bottom line where pre-payments come into play, so we need to include that in the explanation as it's what 98% of people think about.

 

[Technoman]

Yessir, conflicting liabilities was a question I had that couldn't be easily answered by anyone I talked to. So...Just did Turbotax...."cap gained" my way into the 7500 liability. .estimated payments should put me even at year end.
But...my super expensive standalone charging station will be pushed into filing tax year 2024 with the 30% rule. I will charge myself a decent wage to install it !
Cheers

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