2011 TAX TIME Questions

[mwalsh]

Did you have to pay the 10% penalty on the withdrawal of the IRA(s)?

No. She's already reached the age where she can take distributions.

 

[dgpcolorado]

Did you have to pay the 10% penalty on the withdrawal of the IRA(s)?

No. She's already reached the age where she can take distributions.

My strategy was to convert some of my regular IRAs to a Roth IRA to boost my taxable income to the ~$60K needed to use the tax credit. It's not as efficient as taking the money out gradually, but it is better than losing the tax credit (and the very generous state tax credit here is sharply reduced for leased cars, so leasing wasn't a viable option).

 

[thankyouOB]

i dont think the penalty is an issue in a IRA to Roth conversion, just if you withdraw to cash. (I am past the penalty age, so didnt ck that out.)
you still create the conversion as income, though; that is the point of doing it in terms of the EV credit.

 

[dgpcolorado]

i dont think the penalty is an issue in a IRA to Roth conversion, just if you withdraw to cash. (I am past the penalty age, so didnt ck that out.)
you still create the conversion as income, though; that is the point of doing it in terms of the EV credit.

Yes, no penalty for conversion, that's why I did it. There is an income limit for doing conversions but if one has an income that high getting the federal EV tax credit isn't an issue to begin with.

One can covert any amount needed—assuming the traditional IRA balances are high enough—so the amount can be fine-tuned to boost income to the $7500 income tax level. Once the money is in a Roth IRA it can grow tax-free for good.

 

[DesertDenizen]

I sold some stock, ones I wanted to get out of anyway, to drive my taxable income as well. I almost missed how the tax liability factors in and I would have missed out on most of the credit. Phew, close to a real knuckle headed mistake.

 

[thankyouOB]

I sold some stock, ones I wanted to get out of anyway, to drive my taxable income as well. I almost missed how the tax liability factors in and I would have missed out on most of the credit. Phew, close to a real knuckle headed mistake.

yes, and if you do it with an IRA to ROTH conversion, you can deramp some of it before the filing deadline, if you find that you transferred too much and dont want or need to pay that much tax to qualify for EV and EVSE credit.
this technique beats stock sale as an optional choice as it is flexible.

 

[MaryC]

Just while doing my taxes now. I discovered that in order to claim the $7500 on form 8936 (EV Credit) you must also submit form 6251 for AMT. I don't usually fall into the AMT limits. I just happen to be checking it out just in case and noticed in the instructions under "Who must file", is anyone submitting the EV credit form. I am doing my taxes on my own so take this for what it is worth. Any one else catch this?

 

[mwalsh]

Just while doing my taxes now. I discovered that in order to claim the $7500 on form 8936 (EV Credit) you must also submit form 6251 for AMT.

I don't think that's accurate as a blanket statement. It wasn't for me, at least not according to the TuboTax program - all I filed this year is the 1040, Schedule A for itemized deductions, 8812 for child tax credit), and the 8936 for the EV tax credit.

 

[JPWhite]

Just while doing my taxes now. I discovered that in order to claim the $7500 on form 8936 (EV Credit) you must also submit form 6251 for AMT.

I don't think that's accurate as a blanket statement. It wasn't for me, at least not according to the TuboTax program - all I filed this year is the 1040, Schedule A for itemized deductions, 8812 for child tax credit), and the 8936 for the EV tax credit.

I agree that it all 'depends'. AMT is for a specific tax situation, it didn't apply to me either.

 

[tschaubal]

Hi

Anyone with a 2012 Nissan Leaf delivered in 2011 do their taxes ? It seems that in the drop down selection, 2012 Nissan Leaf is not listed and hence it is not showing p in my tax deductions. Anyone else facing this issue ?

Thanks

 

[planet4ever]

It seems that in the drop down selection, 2012 Nissan Leaf is not listed and hence it is not showing p in my tax deductions.

You are obviously talking about one specific tax preparation program. Which one?

[No drop downs for me, since I use the IRS forms and instructions directly!]

Ray

 

[tschaubal]

My taxes are being done by a Tax Professional. I am not sure what software they are using.
I am basing my theory on the below link on IRS

http://www.irs.gov/businesses/article/0,,id=230506,00.html" onclick="window.open(this.href);return false;
The 2012 Nissan is not listed.

If the tax preparations softwares are using the database provided by IRS, then it will not be accepted.

Tushar

 

[mwalsh]

If the tax preparations softwares are using the database provided by IRS, then it will not be accepted.

Tushar

Preface: I'm not a tax professional. Won't be responsible for you being audited.

I would imagine that they are far more interested in the year put into service than they are the model year of the car (even though the year is a requirement on the form).

 

[lpickup]

Hi

Anyone with a 2012 Nissan Leaf delivered in 2011 do their taxes ? It seems that in the drop down selection, 2012 Nissan Leaf is not listed and hence it is not showing p in my tax deductions. Anyone else facing this issue ?

Thanks

Using TaxACT software the make/model was a type-in field and thus I had no problems deducting my LEAF. Your tax professional should inquire with the company that writes his software and ask how to get around this.

 

[ebill3]

I am not trying to be a smart ars, but isn't that the job of a tax professional ? To resolve such problems?

Bill

 

[thankyouOB]

I found this:
Q. Does the Alternative Minimum Tax (AMT) impact the alternative motor vehicle credit?

A. Starting in 2009, the new law allows the alternative motor vehicle credit, including the tax credit for purchasing hybrid vehicles, to be applied against the alternative minimum tax. Prior to the new law, the alternative motor vehicle credit could not be used to offset the AMT.

this publication:
http://www.irs.gov/newsroom/article/0,,id=211307,00.html" onclick="window.open(this.href);return false;

 

[SanDust]

If the tax preparations softwares are using the database provided by IRS, then it will not be accepted.

Just select the 2011 MY. If it bothers you, use a pen to change 2011 to 2012. Unless of course you're filing electronically, in which case you may be able to override the field or it will have to remain a 2011 MY. Not a big deal. As mwalsh says, the MY isn't relevant at this point.

 

[planet4ever]

I found this:

A. Starting in 2009, the new law allows the alternative motor vehicle credit, including the tax credit for purchasing hybrid vehicles, to be applied against the alternative minimum tax. Prior to the new law, the alternative motor vehicle credit could not be used to offset the AMT.

this publication: http://www.irs.gov/newsroom/article/0,,id=211307,00.html" onclick="window.open(this.href);return false;

That's indisputably correct, but I trust you aren't trying to suggest that I have misunderstood the disastrous effect of the Tentative AMT on the EVSE credit. The T-AMT is calculated on form 6251 line 33, and does not yet include the EV credit. If you have to pay the AMT tax, that value is carried forward to form 1040 line 45, Then later the EV credit is subtracted at line 53.

The problem is that form 8911, for the EVSE credit, subtracts the EV credit from your regular tax first, then compares with the T-AMT which is before subtracting the EV credit. You can only claim the EVSE credit if (T-AMT) < (regular tax) - (EV credit). That simply won't happen.

Ray

 

[mwalsh]

The problem is that form 8911, for the EVSE credit, subtracts the EV credit from your regular tax first, then compares with the T-AMT which is before subtracting the EV credit. You can only claim the EVSE credit if (T-AMT) < (regular tax) - (EV credit). That simply won't happen.

Ray

Correct, I looked back at my 2010 tax paperwork and it's TMT that kills the EVSE tax credit, not AMT.

 

[thankyouOB]

suggesting nothing.
i havent been with my tax person yet, but in preparing to do them, I found that.
thought folks might like to know.
i take your point. it is tough to earn allot of money. in some cases, you have to pay more taxes than folks making only modest 5 figures.