crisis re: the 7500 federal tax credit

[Volusiano]

Don't forget to claim the sales tax on the purchase too!

You're allowed to deduct either your sales tax or your state and local income tax. In the case your state income tax deduction is higher than your sales tax, you'd want to take the state income tax deduction instead. Too bad you can't have both...

 

[coqui]

Yes. I'm in the same boat (tous dans le meme bateaux). Got the $7500 credit but not the EVSE one. I'm in the Duke Energy Pilot program (they study us early adopters' charging habits in exchange for a reduced price charger); did not get the charging station credit.

I didn't buy a Leaf yet (Nebraska roll-out is not until summer, 2012), but I played around with TurboTax last night and entered the information as if I bought one and the credit came up as everyone else is saying.

HOWEVER, when I entered the information for the Charging Station (estimating a cost of $2100) it came up with a credit of 0. In reading through the details TurboTax says if you pay AMT (which I do) you are not elligable for this credit. Can anyone confirm that is true? I was not aware this was the case.

 

[FLBoy]

Wow. That's all I can say. It took my tax preparer all of 3 min to do this. You can also read the directions on the IRS website on how it works. Why do so many people let alone a tax "person" (data entry people) struggle with something so easy and basic? You owe $10K then you pay $2500. You paid 10K then you get $2500 back. What is so complicated about something so basic? If your tax person can't figure it out then you have the wrong tax person unless it is a return by donation situation You can deduct that buy the way.

I love it when someone marvels at why some people "struggle with something so easy and basic"--and then gets it wrong themselves! If you paid $10K in withholding, and your tax liability before the credit is $10K, wouldn't you get $7500 back?

 

[EVDRIVER]

Wow. That's all I can say. It took my tax preparer all of 3 min to do this. You can also read the directions on the IRS website on how it works. Why do so many people let alone a tax "person" (data entry people) struggle with something so easy and basic? You owe $10K then you pay $2500. You paid 10K then you get $2500 back. What is so complicated about something so basic? If your tax person can't figure it out then you have the wrong tax person unless it is a return by donation situation You can deduct that by the way.

I love it when someone marvels at why some people "struggle with something so easy and basic"--and then get it wrong themselves! If you paid $10K in withholding, and your tax liability before the credit is $10K, wouldn't you get $7500 back?

I'm marveling at how much discussion there has been on this topic for so long and the competency of tax "professionals". The IRS description of the credit is quite clear and does not require an accountant to understand the concept but it seems many tax "people" can't process the form. What I meant to say was if you paid $10K and it was your liability, then you get $7500 back. There has been so much discussion on this and yet it is simply a "coupon" toward what one owes on a specific line of the tax return. Once entered into tax software by a "tax professional" it is very straight forward. If the person that does your taxes can't read the form and enter it in the system and simply tell you what you owe or will get back then I would question the individuals skill set, as mentioned by others. The EVSE credit is however more complicated.

 

[Knoxvegas98]

I am a CPA and a leaf owner...

As others have said the credit is non-refundable and it can't be carried forward.

I don't know what your accountant was thinking, it has nothing to do with what you have already paid in. For you to get the full credit your Tax for the year just needs to be $7500 or more. If your Tax for the year was $7500 and you have already had $7500 w/h from your pay checks then you will get the full $7500 back.

The one thing no one has mentioned is that the credit will not offset payroll tax liabilities. Say for example that you have a job (and receive a w-2) and have a business on the side. (so you have a schedule c on your return also) Then say your tax from your income is $6,000 and you had the $6,000 w/h from your paycheck. But, say part of your income is from self employment income, say $10,000 is from self employment income. Payroll taxes are approx 15% for self employed individuals. So you would owe $1500 for payroll taxes. In this situation you would just get $4500 back if you didn't make any estimated payments during the year for the payroll taxes because the credit would not help offset the payroll tax liabilities.

Bottom line is if you have tax of $7500 from your income you will get full use of the credit. I hope this clears up your quesitons OP.

 

[coqui]

Cool.

I am a CPA and a leaf owner...

I think the problem may be - simply - the different software packages that are out there. Couple that with the fact that my tax preparer had had zero experience preparing Form 8936 for anyone before I came along :lol:
What you're saying and the IRS website are relatively clear :roll:

 

[vin944]

TT just whipped it right out. I had $0.00 fed tax liability this year. I did use HR block early in the 2000s but didn't get out of there for less then 5 bills. Rental, wife business, stock trading etc. I gave TT a try and it was timely but easy. And since I'm a BofA customer (probably downside) I got a 35% TT discount. Total cost with efiling --> $85 big ones.! So my question is, why doesn't everyone on this forum use TT?

 

[lpickup]

Total cost with efiling --> $85 big ones.! So my question is, why doesn't everyone on this forum use TT?

I used TaxACT and it also whipped it right out, but it only cost me $18.

There were a few times in my life though that I have used a professional, for example when I moved from one state to another, and another time when I had a very large "theft/casualty loss" that I wanted a pro to sign off on.

 

[baronvonshush]

Total cost with efiling --> $85 big ones.! So my question is, why doesn't everyone on this forum use TT?

Why I don't use TurboTax or anything similar: you said it right there, $85 big ones. Seems silly to have to pay for the privilege of paying the government. :?

I've used an Excel spreadsheet for several years that I just update each year based on the rules and instructions for the current tax forms. I have one worksheet for federal and one for state - they refer to each other since state AGI is based on federal AGI, and federal itemized deductions include state income tax. Our tax situation is pretty simple (dual income, some taxable interest, itemized deductions with mostly mortgage interest) so it's easy enough, and most importantly, free! Usually takes an hour or two, but I'm happy to do that and save the money. I've checked it against other options in the past and have always come out about the same or slightly better.

Back before I was married or owned a home, it was even easier - 20 minutes with a printed form and a calculator was all it took. If our situation ever became much more complex, I'd probably begrudgingly take it to a professional.

Of course, I really wish the IRS would just develop a web application that everyone can use to file online for free. It's their job to collect our taxes anyway, so it should be their responsibility to provide this. Would probably save the government a lot of money, too. But then that would kill the market for TurboTax and others, and we can't have that... :roll:

 

[lpickup]

Of course, I really wish the IRS would just develop a web application that everyone can use to file online for free. It's their job to collect our taxes anyway, so it should be their responsibility to provide this. Would probably save the government a lot of money, too. But then that would kill the market for TurboTax and others, and we can't have that... :roll:

They do have online forms that you can fill out. But they are not quite perfect. For example, it requires selecting the year/make/model for the 8936 tax credit form, yet it doesn't list the 2012 Nissan LEAF as an eligible car. Unfortunately it looks like they can't keep up.

Also, I think the major tax programs all have a "free" option (TaxACT does at least) if you have simple taxes. I did both my sons' federal returns using that option, and we filled out the state by hand.

 

[baronvonshush]

Also, I think the major tax programs all have a "free" option (TaxACT does at least) if you have simple taxes. I did both my sons' federal returns using that option, and we filled out the state by hand.

Yeah, we've never qualified for any of the free e-filing options, so it's still 20th-century printed paper and snail mail for us. :roll: My point was that the IRS should offer free online filing for just about any tax situation regardless of complexity (with the caveat that if you provide incorrect information, that's on you). I find it ridiculous that this isn't available in 2012.

 

[planet4ever]

I've used an Excel spreadsheet for several years that I just update each year based on the rules and instructions for the current tax forms. I have one worksheet for federal and one for state - they refer to each other since state AGI is based on federal AGI, and federal itemized deductions include state income tax. Our tax situation is pretty simple (dual income, some taxable interest, itemized deductions with mostly mortgage interest) so it's easy enough, and most importantly, free!

Yup, exactly what I do -- well, almost exactly. I use the free Open Document Spreadsheet, since I refuse to pay Microsoft for Excel. My tax is a bit more complex than yours, since we have a home that we rent, and usually some stock transactions, but I still do it myself, mostly because it is free, but partly because it helps me understand what is really going on.

Ray

 

[vin944]

The spreadsheet sounds like a nice setup. Never heard of TaxAct but good reviews there. I used TT past few years and found it easy enough to shell out for it. Since it has my history, probably will have to stick with it. But I would give the spreadsheet a try for sure. Anyone willing to lend me one of their templates?

 

[lpickup]

Since it has my history, probably will have to stick with it. But I would give the spreadsheet a try for sure. Anyone willing to lend me one of their templates?

I agree that sticking with a company that has your history is a good idea. Now I'm not trying to promote TaxACT, although I've used it (or its predecessors) for over 15 years now, but there is a facility available for it to "read" PDFs of last year's tax return to get at least one year's worth of history (which is probably all most people need).

 

[rslatkin]

Also, I think the major tax programs all have a "free" option (TaxACT does at least) if you have simple taxes. I did both my sons' federal returns using that option, and we filled out the state by hand.

Yeah, we've never qualified for any of the free e-filing options, so it's still 20th-century printed paper and snail mail for us. :roll: My point was that the IRS should offer free online filing for just about any tax situation regardless of complexity (with the caveat that if you provide incorrect information, that's on you). I find it ridiculous that this isn't available in 2012.

We use Free File Fillable Forms. Free federal e-filing, and does some of the math. No problem doing our 1040 with schedules A and B and the EV form.

 

[baronvonshush]

The spreadsheet sounds like a nice setup. Never heard of TaxAct but good reviews there. I used TT past few years and found it easy enough to shell out for it. Since it has my history, probably will have to stick with it. But I would give the spreadsheet a try for sure. Anyone willing to lend me one of their templates?

Probably too late this year for most people, but I just discovered this site: http://excel1040.com/" onclick="window.open(this.href);return false;

You can download a spreadsheet that not only has all the major forms and formulas (but not the EV tax credit form), but it's made up to look just like the actual forms so you can print directly from Excel. Pretty slick. Of course, as they advise on the site, check every formula since you're still on the hook if they made a mistake in their spreadsheet.

I just quickly went through and compared it to my own home-made spreadsheet, and got the same answer, so that's good! However, a few things I noticed, in case anyone wants to try it:

* Initially it's not clear where you enter data because most of the cells (anything that calculates a number based on other cells) are locked. Once I started with the W-2 tab, things started getting filled in and it became more obvious.

* There's a manual override column for certain values that may be different from what it calculates. For example, the state tax line on Schedule A needs this because the spreadsheet calculates your state tax as what you entered from your W-2. But in the vast majority of cases, your actual state tax will be different from what was withheld on the W-2. So you use the manual override to fix it.

I'm pretty impressed with what they've done, but I think I'll stick with updating my own spreadsheet every year, because I end up paying much more attention to what happens to my money at each step. Plus next year I'll need the EV tax credit form.

 

[vin944]

Great thanks I will look into this. And thanks for the tips.