Detailed Answer:
Step 1: Look at Line 11 on your 2022 Tax return (Form 1040).
Step 1a: For the vast majority of taxpayers this won't apply: Add to Step 1 any income from Puerto Rico you excluded, any housing exclusion foreign income you claimed (Lines 45 and 50 of Form 2555), and American Samoa residential income excluded (Line 15 of Form 4563).
Step 2: If that number is less than:
$300,000 Married Filing Jointly
$225,000 Head of Household
$150,000 Single and any other filing status
then continue to Step 3. Otherwise, you currently DO NOT qualify for any rebate, and will need to reduce that number on your 2023 Tax return below those limits. You can reduce that number by traditional 401k contributions, or some small-business options.
Step 3: Look at Line 24 on your 2022 Tax return (Form 1040).
- If it is greater than $7,500 and your income in 2023 stays the same or increase, you will get the full $7,500.
- If it is less than that, you get that amount (assuming your income stays the same). If your income increases then you may get a larger refund, up to $7,500.
In other words, in order to get the full tax credit, you must OWE at least $7500 in taxes and be under the income limits.
You absolutely CAN NOT carry over for a few years, or even one more year. It is a one time credit. Any unused credit is LOST!
Q7. Is the new clean vehicle credit refundable or able to be carried forward? (updated March 31, 2023)
A7. The new clean vehicle credit may only be claimed to the extent of reported tax due of the taxpayer and cannot be refunded. The new clean vehicle credit cannot be carried forward to the extent it is claimed for personal use on Form 1040, Schedule 3, Additional Credits and Payments.
from page 3 of this IRS document: https://www.irs.gov/pub/taxpros/fs-2023-08.pdf
* If you're concerned about battery degradation, you can take a look at this site [teslalogger.de] (Pull down the menu for Model Y LR)
* If you like to nerd out on graphs, data, and overal health of your vehicle, get a program called teslamate that can be installed on your home server. every time your car parks in your garage it will send driving telemetry data to it with pretty graphs [teslamate.org] and all.
* You can also opt to get teslausb [github.com], which can wirelessly send all your dashcam footage to your home server every time you pull into your garage.
Top Comments
EV good if you have a dedicated charging station at home.
if you live in an apartment complex or condo its not as consumer friendly, unless you want to pay up the wazoo at supercharger stations and inconvenience yourself by having to go there every time to charge. Go to plugshare.com to see how much you will be paying in your area. Just multiply cents * 45kwh (assuming you're charging from 20% to 80%). For my area I would be paying $20-$25 per charge at a supercharger station. At home, with the national average electrity rate of 0.14 / kwh, it would cost $6
if you live in california, don't forget that you can also get another $2k in CVRP rebate. you get a check in the mail but the wait time is long to get it.
also don't forget about the single occupant HOV lane decal you can sign up at the DMV website.
basic autopilot is more than sufficient. autopilot still has a long ways to go imo. definitely not worth getting the advanced AP and definitely not full self driving at $15k. as MKBHD always says, don't buy a product on a promise of features yet to come.
also, make sure you setup your electricity usage to "time of use" or EV-specific plan as your bill will assuredly go up. Don't be on those tiered plans. Yes, you will end up saving money compared to ICE vehicles paying for gas, unless you get a hybrid, which is a bit more comparable, especially in areas where electricity is expensive.
additionally, people forget that you need to install a wall connector or mobile connector in your home. equipment costs $230 for the mobile connector +$45 for the nema 14-50 adapter, which is good enough especially if you do scheduled charging at night to save on electricity. installation itself will vary depending on your region and how much electricians will charge you, but it can get expensive. just make sure you're not getting ripped off as electricians are aware of the EV craze and asking for higher premiums on them. installation can go anywhere from $1k-$2k+. (according to poster SamirPD, you can ask the electrictian to install a dryer outlet and it should save you money and prevent you from being ripped off). One worthy note, EV charger and installation is tax deductible at 30%, just need to fill out the tax form [irs.gov] when you do your taxes next year. EDIT: SD poster hiro916 indicated that the 30% tax deduction only pertains to low income or rural tract areas, so YMMV [reddit.com].
as for car insurance, I'm paying $95 a month through Geico, but thats with a robust policy.
if you are impatient like me, and want to get one right away without having to wait, go to the waitingfortesla discord server [discord.com] and setup alerts for any time a Model Y drops in your local area. You have to act quick as they get snatched up relatively quickly. You can see whats in inventory on their website too [waitingfortesla.com]. Don't expect to see base model Y LR coming into inventory. If you want to pick something up quick settle for the 20 inch induction wheels (costs $2k extra) as they are more readily available. You can always sell the tires if you want to recoup some of the costs and get an aftermarket hubcap that look better than stock anyhow.
If you're interested in a real world range comparison of current popular EV's check out this YT video [youtube.com].
once you pick up your car you have 100 miles and 7 days to report any defects. panels gaps aren't as much of a problem anymore compared to years past, but be on the lookout for them. paint quality isn't so great out of the factory, mine came with swirl marks all over and had to get it paint corrected.
if you're concerned about battery degradation, you can take a look at this site [teslalogger.de] (select dropdown and look for Y LR AWD US to see the average degradation over time based on mileage. on average after 50k miles you should see about a 10% degradation, and it will degrade more slowly 50k+ miles onwards.
in terms of accessories, the only real requirement imo that you need are mud flaps. reason being is because without them, the rear passenger quarter panels will get hit with rock chips very quickly. tesmanian is a good aftermarket seller, or you can just opt for ones you see on amazon. if you want to go deeper into accessories temu is a great site for low prices compared to amazon.
if you like to nerd out on graphs, data, and overal health of your vehicle, get a program called teslamate that can be installed on your home server. every time your car parks in your garage it will send driving telemetry data to it with pretty graphs [teslamate.org] and all.
you can also opt to get teslausb [github.com], which can wirelessly send all your dashcam footage to your home server every time you pull into your garage.
my personal thoughts on ownership thus far. overall i like it. i am using it as a daily driver / commuter car. i don't think of Model Y and 3 as a 'luxury' vehicle. I see Tesla as a software company trying to be an automaker, and the legacy automakers are trying to be more like Tesla by being more tech focused. Teslas are continuously getting software updates to improve year over year. Interior build quality is spartan, and the ride quality need some improvement, especially if you are in an area with poor road conditions. if you're really into tech like me, this is the car for you. Performance vehicles I still prefer ICE cars over EV's however. first thing you will notice in an EV though, is the instant torque. that is what will grab you immediately.
If you have questions and need instant feedback join the Tesla discord, I'm active on there and other members can assist with questions you may have: https://discord.com/invite/tesla
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https://supercharge.inf
But nowadays there are so many superchargers it is not that important anymore and I only use superchargers when going on trips over 3 hours away on vacation.
Another website you can use if you don't have an EV and believe some of the comments about charging for an hour! is https://abetterroutepla
Fun fact based on yesterdays tesla earnings call. Model Y is the best selling model across all of Europe for the first quarter and here in the US, if you exclude trucks.
A positively looked high ranking or affluent neighborhood/city with good schools in the bay area and a single family detached home that is at least 2000 sq ft with a lot size that still has a decent front and back yard will likely need to be household making 300K and even at that the home is not going to be lux. It might just be what out of state people would even consider "meh, thats just regular middle class lifestyle"
But if someone is making $300K in say north dakota, wisconsin, etc they probably would be living in the more exclusive and top tier neighborhoods with fancy homes and many would view as "rich"
The california rat race got everyone (mostly because again im sure most SDers are from there) that the rest of the nation is like them. CA is weak
https://service.tesla.c
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Add 30% higher insurance to your mileage. That is an additional ~ $1.2k per year. The higher insurance will eat up all your gas savings. Have you tried to repair dents on your Tesla? I'm not even mentioning that you are paying a premium price for the EV to begin with. ā
It's not even talking about the same $7500 credit under discussion here.
Is line 24 on your 1040 $7500 or more? If yes, you get the full credit. If that line is less, you get whatever the # on that line is.
That's it.
There's no clawback if you sell the car later. There's no holding period.
None.
What that guy posted isn't about this rebate at all. This rebate is quite simple despite people continually trying to make it more confusing.
There's ways to increase your tax liability that might be worth doing to capture the full deduction of course (regular to roth IRA conversion being the most common- but see a tax pro if genuinely interested)
Yup. You'll need $15,000 in tax liability (form 1040, line 24) to get all of both though.
You cannot get two EV credits in the same year. You are limited to one credit every 3 years.
From turbotax:
1) Is there a time frame that I have to own the car in order to qualify for the tax credit?
2) Will I still be eligible to file for tax credit if I sold the car same year as purchased?
1) Yes, you would need to own the vehicle for 3 full years to not end up having to pay back the credit or part of the credit.
2) No, you would not be able to take the credit. The recapture amount for the first year of service is 100% so even if you did take the credit you would need to pay it back in full.
3) The new owner would have to prove their right to claim the credit. This is not something you need to deal with.
What you are describing would be ridiculous. I could buy 8 Teslas and turn around and sell them right away and reap 8 x $7500 = $60k of tax credits to completely offset my tax liability on $300k. No way the government would allow more than 1 credit or immediate sale. Heck, they even claw back asset amortization on a laptop if you took a 100% bonus depreciation in year 1 and sold it in year 2.
It's not really that complicated unless you're trying to play games like the other poster said (e.g. selling it the same year).
https://www.irs.gov/credits-deduc...3-or-after
So long as 1) the car you're buying qualifies (Model Y does) 2) make less than:
$300,000 for married couples filing jointly
$225,000 for heads of households
$150,000 for all other filers
You're good.
ā1) nayers/hearsayers and full out haters
2) oil company lobbyists
3) charger infrastructures
4) car company not fully invested on them
4) fear mongers
5) uninformed consumers
6) price mark-ups (although true for most in demand cars)
As for Tesla's price reduction, why would the haters see this as a negative? Is it because they'll see more EV's on the road? Also for the haters, why go out your way to vandalize a Tesla car?
IRS doesn't ask who paid, all that matters is that the relative qualifies and can claim the tax credit, but it will have to be by all intents and purposes their car. If you are fine with that then good luck.
It is true for the USED EV credit though (which has a bunch of other limits on it too... car must be of a certain age, under a certain price, etc)
none of the other recapture stuff you cite is true either of the new car credit.
What's funny is you didn't notice none of the "rules" you claimed applied to this credit appear in the actual IRS link YOU posted
That's because the IRS link is talking about the current new-EV consumer credit.... not the one your turbotax software was talking about.
The fact those buyers don't exist is why it's a ridiculous idea.... NOT any imaginary "once every 3 years" rule that doesn't exist for this credit.
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So I am on a payroll and I will be getting less than 150k - joint filing.
My employer cuts just the right amount of tax which makes my tax refund about 500.
So, if I get this vehicle, will my tax refund be $8000?
Thanks in advance.
A tax credit means that you should already have 7500 in your tax account before your employer paid your share of taxes. Therefore if at the end of the year it turns out you owed only 18K and your employer already took that and paid to the IRS, you can ask them to REFUND 7500 of that because they should have Credited you that before taking any money.
I've seen people here confusing this. A tax credit applies to taxes you owed for the year, whether you paid it, or your employer deducted it and paid it or owe it at the end of the year. It is still the same thing. All that matter is that you had taxes for the year.
In your case look at Box 2 of your W2, if that is more than 7500 and you qualify then you can claim that 7500 from that.
On your 1040 line 24 shows how much in taxes you paid, again if that is more than 7500 then you can reduce that number by 7500 or if you already paid it then you can claim it back as a refund.
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