WHOHOOOOOO! Yah, after the last few posts the light came on and everything made sensewsbca wrote:Yep (if your tax picture is otherwise the same for 2011, when you'll be buying the car)

WHOHOOOOOO! Yah, after the last few posts the light came on and everything made sensewsbca wrote:Yep (if your tax picture is otherwise the same for 2011, when you'll be buying the car)
Dave...DaveNagy wrote:Holy carp!![]()
I've been totally misunderstanding how this whole "tax liability" thing is supposed to work! I thought you had to have a "bill" for at least $7,500 come April 15th, or at least some of the credit would go to waste.
Because of withholding, I typically owe only a few hundred dollars to the Feds when I file. So, at the beginning of this month, my wife and I both "turned off" all withholding. (We set our W4 exemptions to 10, the max.) My theory was that since we had about $7,000 in withholding last year, turning it off for the entirety of 2011 would result in about a $7,000 "bill", come tax time. Close to perfect. The Leaf credit would offset that, and all would be dandy. Of course, the danger would be if I didn't end up buying the Leaf. Then, the IRS would be pissed off at us for under-withholding, and would probably fine us on top of wanting all that money right-damn-now.
But, apparently I don't need to do any of that?
I should just set my withholding to "normal", and expect to get approximately all of that withholding back (up to $7500) when it comes time to file my 2011 taxes?
(Other threads on this subject repeatedly state that this credit can not be used to "create" a refund. I can see how one can parse that statement to be consistent with what being described here, but it's quite confusing. To me, at least.)
Thank you for the clarification.
Actually, your strategy is a good one in many cases. After all, why should you loan the government $7000 this year and have them pay it back next year with no interest? The problem would be, as you suggest, if you ended up not getting the LEAF this year. Let's say, for example, that you expect to be able to get it next fall, but it turns out Nissan delays the orders for some reason (not that anything like that would ever actually happenDaveNagy wrote:Because of withholding, I typically owe only a few hundred dollars to the Feds when I file. So, at the beginning of this month, my wife and I both "turned off" all withholding. (We set our W4 exemptions to 10, the max.) My theory was that since we had about $7,000 in withholding last year, turning it off for the entirety of 2011 would result in about a $7,000 "bill", come tax time. Close to perfect. The Leaf credit would offset that, and all would be dandy. Of course, the danger would be if I didn't end up buying the Leaf. Then, the IRS would be pissed off at us for under-withholding, and would probably fine us on top of wanting all that money right-damn-now.
But, apparently I don't need to do any of that?
I should just set my withholding to "normal", and expect to get approximately all of that withholding back (up to $7500) when it comes time to file my 2011 taxes?