I’m betting by the end of Q2 2018 electric car sales will be on a MASSIVE decline. By Q4 most manufacturers will be backpedaling on manufacturing plans for EVs in North America and lease options will be the only way for dealers to move units. 2019 will be the make or break year as Congress will either adjust tax law to rebate unused tax credit or fail to act and electric cars, including Tesla, will be in serious peril.
The increased standard deduction means a person has to make approx 120k in income to even have enough tax liability to start itemizing deductions and nearly double that for joint filing. Joint filing is an even bigger disadvantage as the 24000 standardized deduction makes it almost impossible to have enough itemized tax liability to use the credit. Since it doesn’t roll forward like the solar credit and doesn’t rebate like most state credits it’s been quite effectively neutered with zero political fallout. The public hasn’t caught on yet and neither has the press, but this is going to murder the ROI and competitive price advantage of electric cars.
The tax credit is completely unrelated to the standard deduction. Many people like me who live in high tax states will be paying more in Federal taxes, not less, so more people will have a total federal tax liability of at least $7,500, and thus will qualify for the full tax credit.
No it isn’t. You won’t qualify for the tax credit unless you already have at least 12k/24k in itemized deductions AND tax liability. You have to EXCEED the standard deduction in itemized deductions in order for it to benefit you.
Posts thread on car lease forum Says Federal Credit no longer relevant to Joe the commuter Federal Credit only applies to leasing companies here But EV is dead
That is not true. As long as your total tax liability is at least $7,500, you will get the full credit, no matter how much your deductions are. I will not be itemizing in 2018 due to the limits on deductibility of state taxes, but will still have a total tax liability of well over $7,500, so I would qualify for the full tax credit.
Sorry but you’re wrong. You qualify yes, but since your standard exceeds your itemized you get ZERO benefit from it. You do not net. You have to owe 7500 more than the standard deduction to fully itemize the credit because it does NOT rebate.
The EV tax credit, is a credit reportable on line 54 (tax tear 2016) of form 1040. At that stage of the form all the deductions are taken. The EV credit is not an income deduction it is a tax payment credit. And as CruiserChuck stated
Take a look at form 1040 (line 54) to see how the EV credit flows out:
The Tax Credit is a CREDIT against taxes owed. Not a deduction against income. It’s also not a refundable credit (hence why if you don’t owe 7500 in tax, its not worth 7500 to you)
Right. So you have to EXCEED the standard deduction to itemize. You can’t take the standard deduction AND the ev credit.
Then you have to ALSO have a tax liability that exceeds the amount of the tax credit plus tax liability reduction from the higher deduction threshold.
At 228k in combined household income, with a mortgage and student loan interest, I can’t crack the new threshold to itemize the credit and my income far exceeds the average american.
You can always take the standard deduction (or itemize, if you choose) AND get a tax credit of up to $7,500 on your remaining tax liability. I don’t believe this has changed.
The EV Credit is not a deduction. It has NOTHING to do with itemization… itemized deductions aren’t credits either.
In 2017, If someone who is married, lives in florida (therefore pays no state income tax), earns $100K (so to make clear their federal tax burden is over $7500), rents (therefore pays no property tax). Is miserly (so gives no charity). And they bought a volt. They won’t itemize, they’ll take the standard $13000 married deduction, and they’ll still get the $7500 credit back on their taxes.
This is not different than what you are saying will happen in 2018, just with different numbers where more people will be in such a category. But as it shows you, one can take the standard deduction and get the $7500 credit.
With model 3 is being ram up, other company is entering the game the ev price will get cheaper and will be more affordable.
Tesla plan was to have the model 3 auto drive and provide taxi services without driver. GM doing the same. ev car is the future, no longer need tax support when the price go down. As soon as the law pass for self drive car
I don’t believe the EV price will go down unless the car company is doing that on purpose to attract all ends of the market. More EVs on the road might dampen the secondary used car market. Just because you have more builders building new homes, it don’t mean the new homes are being sold for less.
Also, I don’t want to get into a conversation about taxes here because it’s best to just talk to your own CPA, but tax credit and deductions are different things. Let’s talk about cars here✌️
Electric cars are still a very niche market. There is not enough volume out there to bring down the cost that substantially until it appeals more to the masses. A hybrid is one thing, but a pure electric car still has one major drawback to be the main bread and butter car for most families…range anxiety. If you plan on taking a trek 8 hours from home, you can fill your gas tank in 5 minutes at this point when you get low. For an electric car, you have to find a charger, twiddle your thumbs and wait. California seems to have adopted the best so far, however, considering the 39 million people in the state, it’s still a niche product.
