2024 Tesla Model Y + $7,500 Federal Tax Credit

Dr. J

Apr 8, 2024 2:28 PM

39.4K Comments

Joined Nov 2005

Dr. JApr 8, 2024 2:28 PM

39.4K Comments

Quote from SlickJimee

:

So can someone explain something about this tax credit? My understanding is that this $7500 is only useful if you actually have to pay $7500 or more in taxes, correct or no? If correct, and a person has less than $7500 taxes due typically, can/should that person withhold partial/whole salary amounts in the same year of purchase, so causing the person to have tax liability at the end of the year which would be closer to $7500 or more, where then this Tesla credit would apply to it?

Sorry but this is why we need some sort of class in schools to teach basic life skills.

What's withheld from your check has zero to due with tax liability - that's the amount of tax you are liable for at the end of the year, based on your income, deductions, etc, regardless of if you are getting a refund or have to write the IRS a check. Nonrefundable tax credits (all of them) do not pay you back in excess of your tax liability.

3

Chlamber

Apr 8, 2024 2:29 PM

334 Comments

Joined Jun 2015

ChlamberApr 8, 2024 2:29 PM

334 Comments

Quote from Knightshade

:

No.

As long as your income is below 150k single, or 300k married filing jointly, you can take the credit at point of sale.... and if your tax liability when you file is less than $7500 the IRS will not make you pay back the difference.

Again you don't need specific tax liability-- but also changing your withholding does not change your tax liability at all so your plan wouldn't work even if you needed the liability (which, again, you do not)

Total liability, and how much you "owe when you file" are entirely different things--- salary withholding is just you pre-paying part of the total liability, it doesn't change the AMOUNT of total liability.

Are you sure about the IRS not making you return partial $7500 if your tax liability is less than $7500 after receiving the full amount as POS? That would actually be news to me.

Chlamber

Apr 8, 2024 2:34 PM

334 Comments

Joined Jun 2015

ChlamberApr 8, 2024 2:34 PM

334 Comments

Why do people talk about depreciation by looking in the rear view mirror? We just exited unprecedented vehicle price increases. Tesla sells direct to consumer so those increases were extremely obvious, but less obvious than the millions of dealerships charging insane "price adjustments" during that same time period. Now that pricing has come back to earth at $37490 (it was $36,090 two months ago) I do not see remotely the same level of depreciation taking place. I bought my model 3 brand new for $27,090 in December, a base model Prius costs more than that. We just aren't in the same environment now and future expectations should be adjusted.

1

FishKilla

Apr 8, 2024 2:34 PM

1.3K Comments

Joined Dec 2015

FishKillaApr 8, 2024 2:34 PM

1.3K Comments

More price cuts coming. Demand is soft and Tesla inventory is piling up.

Tesla's stockpile is the biggest it's ever been — and that means price cuts

The Austin, Texas-based automaker is dropping prices after it produced 46,561 more vehicles than it delivered in the first quarter of 2024. That means it has more cars in its inventory than ever before.

The difference between the number of vehicles Tesla built and sold in the quarter "dispels the notion that 1Q deliveries were somehow supply rather than demand constrained,"

https://www.msn.com/en-us/autos/n...2217&ei=23

2

1

JohnS3855

Apr 8, 2024 2:39 PM

21 Comments

Joined Sep 2015

JohnS3855Apr 8, 2024 2:39 PM

21 Comments

Quote from CyanLeopard7900

:

This is a real public service announcement - leasing a car is generally the worst financial decision a person can make. It promises two things: you will cover the new car depreciation and you will always be making car payments (that include interest).

I've leased before and it allows you to drive a brand new car for 3 years with manageable payments and very little money down. Make payments & change oil and you have a new car. But since covid, this is no longer the case as dealerships want 4-5k down to get under $300/month which is insane to me. Buying new and making payments and trading in before car is paid off is essentially the same thing only you're payments are MUCH higher. Only cost effective way to BUY a car is pay it off and keep it for years with no payments, but there are many that enjoy driving a new car every 3 years or so

1

Dr. J

Apr 8, 2024 2:50 PM

39.4K Comments

Joined Nov 2005

Dr. JApr 8, 2024 2:50 PM

39.4K Comments

Quote from FishKilla

:

More price cuts coming. Demand is soft and Tesla inventory is piling up.

Tesla's stockpile is the biggest it's ever been — and that means price cuts

The Austin, Texas-based automaker is dropping prices after it produced 46,561 more vehicles than it delivered in the first quarter of 2024. That means it has more cars in its inventory than ever before.

The difference between the number of vehicles Tesla built and sold in the quarter "dispels the notion that 1Q deliveries were somehow supply rather than demand constrained,"

https://www.msn.com/en-us/autos/n...2217&ei=23

MDS is probably a more cohesive indicator here, but finding up to date data is difficult. Absolute numbers don't mean much. Of course, Tesla issuing confusing data doesn't help and they absolutely know that.

ab2305

Apr 8, 2024 2:55 PM

58 Comments

Joined Mar 2018

ab2305Apr 8, 2024 2:55 PM

58 Comments

Is it possible to co-purchase this car with my parent, who has an income below the threshold, thereby qualifying us for the $7,500 credit? A few caveats to consider: my parent does not have a driver's license. The primary reason for including them in the purchase is to take advantage of their eligibility for the credit due to their lower income level.

EagerCreator930

Apr 8, 2024 2:59 PM

4 Comments

Joined Feb 2024

EagerCreator930Apr 8, 2024 2:59 PM

4 Comments

I see a ton of these Tesla Y's in my area, however, I don't see that the charging infrastructure has increased....for instance I work for a University and even on campus, there aren't a lot of charging stations. And even if I go to the Target located close by, there's maybe 4 or 6 charging ports, even though the parking lot is huge and could definitely accommodate. I'm not saying it's Target's responsibility to have more charging ports, but whoever is leading the charge for more EV's should look to make smarter long term solutions instead of thinking of what is "good enough".

1

nolife

Apr 8, 2024 3:06 PM

2.4K Comments

Joined Feb 2005

nolifeApr 8, 2024 3:06 PM

2.4K Comments

Quote from Chlamber

:

Why do people talk about depreciation by looking in the rear view mirror? We just exited unprecedented vehicle price increases. Tesla sells direct to consumer so those increases were extremely obvious, but less obvious than the millions of dealerships charging insane "price adjustments" during that same time period. Now that pricing has come back to earth at $37490 (it was $36,090 two months ago) I do not see remotely the same level of depreciation taking place. I bought my model 3 brand new for $27,090 in December, a base model Prius costs more than that. We just aren't in the same environment now and future expectations should be adjusted.

Doesn't matter how you fluff it or try to justify it. The price dropped significantly for electric cars in the last 2 years and is still dropping and quite honestly could drop again based on indicators. All cars or not, it is still happening. The people that bought a plain old Chevy Equinox in the last 3 years are just as screwed with the cost and high interest too if they decide to sell it soon. The Porsche Taycan in EU has dropped value massive amounts and the market is flooded with them. Just one more example. It is a very dynamic time. Long term ownership by the masses has not played out, the early adopters are running out and we are hitting a point of overall generic buying by the masses which does not view cars with the same personal passion in the same way people in this thread or do. You can also argue that depreciation is ALWAYS a problem with a new car and if you were truly worried about that you would always buy used anyway.

Last edited by nolife April 8, 2024 at 08:09 AM.

3

mattun

Apr 8, 2024 3:07 PM

119 Comments

Joined Jan 2014

mattunApr 8, 2024 3:07 PM

119 Comments

Quote from kneeldug

:

That's a new deal/technique to me and I'd jump at that if I got it to work like you did! Can you give a little more detail and help me not put a soulless gray Model Y in our garage. Smilie

FWIW, I am in Ohio.

So most of my experience was negotiating with Kia and Genesis the last two years. There's more than one way to skin a cat, so you'll need to weigh the offers the dealerships/manufacturer has on the table for leases and loans. What I've been seeing lately is they happily advertise the federal rebate of $7500 off as "Lease Cash" but often won't stack it with other manufacturer discounts. So you'll often see $7500 off Lease vs. $3500 off Loan and 0.9% APR. Then depending on your situation you need to decide if you're better off stuffing a 0.9% 50K loan in 5% CDs for four years pocketing the difference or doing the less money early lease buy out. Anyway, for the early lease buy out, it really is pretty straight forward if the brand is willing to do it (Nissan was holding out on the Ariya last I checked, but this should work with Hyundai, BMW, Audi, etc.). What is happening is the 2022 tax rebate law was set up so if a consumer purchases an EV, it has to be mostly North American built to fully qualify. However, ALL EVs qualify for the rebate when dealerships lease them (since they technically "own" the vehicle). The spirit of that was to offer cheaper leases, but if you intend to actually own the vehicle then it's an opportunity to purchase it cheaper than straight cash. So, for example, on my wife's Genesis GV70 Electrified, they were asking sticker and advertising $7500 off leases. We got them to match the 3K off the dealership 50 miles away was advertising (this is Slickdeals) and did a three year lease (number of years does not matter). There was a $700 "Lease Set Up" fee added, but otherwise we were simply financing the difference between the residual and the MSRP for three years. Drove the car off. A few weeks later when our lease popped up on the Genesis Finance webside, we hit the Buy Out Quote button. It equaled the MSRP - down payment - 3K dealer discount - 7500 Federal Rebate + 700 Lease Setup + two weeks of interest. Paid it off online like you would any payment and had the pink slip mailed a few weeks later. This would also work to get the tax rebate if you wanted to have your credit union or bank finance the vehicle. Buy it out the same way, but have your credit union write the buy out check.

So the gotchas I've seen is like how Nissan will offer the $7500 off, but will take it from you another way. They'll force the interest on you for the entire term of the lease if you buy out early (not sure how that's legal, but that's what they were doing). I believe vehicles over a certain amount aren't eligible (like I'm pretty sure this isn't happening with $100K Audis). The loophole generally is not offered/pointless for eligible vehicles because you're already getting it (so kind of pointless discussing this with like a Lyriq dealer). I only know Genesis and Kia for sure, so make sure there's no funny business with early lease buy out fees with whatever you're looking at and keep an eagle eye on the paperwork to make sure you are absolutely financing MSRP - 7500 + lease set up fees (they are car salesmen after all and cannot be trusted). The dealership probably won't know/care since this is the manufacturer finance department, so find this out online ahead of time. So remember if you're coming off a Tesla, this is car dealership situation not an online purchase and be prepared for all the trying for 10K of add-ons, "We're selling it to you at a loss", "It's a better deal to buy this one" nonsense for a couple hours. Just remember if you walk away they always call back and nothing cannot be removed from the vehicle price, even $500 Nitrogen Air and $2000 paint protection. Good luck.

Last edited by mattun April 8, 2024 at 08:22 AM.

2

Knightshade

Apr 8, 2024 3:11 PM

15.4K Comments

Joined Sep 2009

KnightshadeApr 8, 2024 3:11 PM

15.4K Comments

Quote from Chlamber

:

Are you sure about the IRS not making you return partial $7500 if your tax liability is less than $7500 after receiving the full amount as POS? That would actually be news to me.

Yes I'm sure, it's specifically called out in the IRS FAQ on the point of sale credit.

https://www.irs.gov/newsroom/topi...les-credit

Q4: What if a buyer has insufficient tax liability to fully use a transferred credit? (added Oct. 6, 2023)

A4. The amount of the credit that the electing taxpayer elects to transfer to the eligible entity may exceed the electing taxpayer's regular tax liability for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture from the dealer
or the buyer.

Quote from EagerCreator930

:

I see a ton of these Tesla Y's in my area, however, I don't see that the charging infrastructure has increased..

Tesla adds like 10,000 chargers a year

But those are primarily for road trips. Vast majority of EV owners simply charge at home where it's both cheaper and you never waste any time "refueling" like you have to with a gas car.

2

Knightshade

Apr 8, 2024 3:14 PM

15.4K Comments

Joined Sep 2009

KnightshadeApr 8, 2024 3:14 PM

15.4K Comments

Quote from nolife

:

Doesn't matter how you fluff it or try to justify it. The price dropped significantly for electric cars in the last 2 years and is still dropping .

Just to be clear- what actually happened was prices shot UP a ton due to supply chain crunch from Covid.

Now they're just going back to normal.

A new-custom-order LR AWD Model Y was $49,900 in April of 2021.

Today a new-custom-order LR AWD Model Y is... $49,990.

Virtually the same price.

It spiked UP a bunch in between, then came back down here to normal.

Does that suck for the folks who bought during the supply crunch when prices were very high? Sure. Same as it sucks for people who buy houses at the top of the market.

2

1

mattun

Apr 8, 2024 3:14 PM

119 Comments

Joined Jan 2014

mattunApr 8, 2024 3:14 PM

119 Comments

Quote from nolife

:

Doesn't matter how you fluff it or try to justify it. The price dropped significantly for electric cars in the last 2 years and is still dropping and quite honestly could drop again based on indicators. All cars or not, it is still happening. The people that bought a plain old Chevy Equinox in the last 3 years are just as screwed with the cost and high interest too if they decide to sell it soon. The Porsche Taycan in EU has dropped value massive amounts and the market is flooded with them. Just one more example. It is a very dynamic time. Long term ownership by the masses has not played out, the early adopters are running out and we are hitting a point of overall generic buying by the masses which does not view cars with the same personal passion in the same way people in this thread or do. You can also argue that depreciation is ALWAYS a problem with a new car and if you were truly worried about that you would always buy used anyway.

So seriously, you get an EV to save time and money. IMHO, you should buy with the mindset of driving it until the wheels fall off. The tech is improving so quickly that depreciation is going to get it regardless, but you'll get that back in five years in gas savings/repairs assuming you have a long commute and in ten years you won't care if it turns to dust. I literally saved 4K a year in gas and bridge toll on a 82 mile commute the past decade by getting a Volt and solar. EVs are the lone case that typical leases are almost justifiable. Like if you just want one but are concerned it'll be a PITA to use the Tesla network with an adapter in a couple years or think 300 miles range isn't enough (personally, I don't, but that's another thread), then doing a lease kicks the can down the road a couple years and you can get what you really want later without the full pain of the rapid depreciation EVs are having now when you buy.

Last edited by mattun April 8, 2024 at 08:26 AM.

1

KevoD

Apr 8, 2024 3:19 PM

2.5K Comments

Joined Feb 2013

KevoDApr 8, 2024 3:19 PM

2.5K Comments

Quote from OGSDER

:

Why do you think he's lying? The income cap isn't that hard to hit. I make twice the income cap. Don't be bitter.

Nobody said it was hard to hit. But nobody asked Napoleon for income verification on Slickdeals, either laugh out loud

1

aifan

Apr 8, 2024 3:20 PM

1.2K Comments

Joined Nov 2004

aifanApr 8, 2024 3:20 PM

1.2K Comments

Quote from EagerCreator930

:

I see a ton of these Tesla Y's in my area, however, I don't see that the charging infrastructure has increased....for instance I work for a University and even on campus, there aren't a lot of charging stations. And even if I go to the Target located close by, there's maybe 4 or 6 charging ports, even though the parking lot is huge and could definitely accommodate. I'm not saying it's Target's responsibility to have more charging ports, but whoever is leading the charge for more EV's should look to make smarter long term solutions instead of thinking of what is "good enough".

You shouldn't need a crazy amount of infrastructure if most people are charging at home with a full charge when they wake up. Remember EV adoption is still pretty low at 7.6% of sales in 2023.

As more people buy EVs you want extra infrastructure along highways to cover traveling. Places with high utility where charging networks can make money.

2

2024 Tesla Model Y + $7,500 Federal Tax Credit

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$44,990

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