Beginning in 2024, purchasers of qualified electric vehicles and plug-in hybrids will receive the US Government Income Tax Credit at the time of purchase. Prior to this, purchasers couldn’t claim the credit until they filed their income tax returns. Under the Inflation Reduction Act, these credits can be transferred to the dealer and used to reduce a purchase price.
These credits can be up to $7,500 for a new vehicle and $4,000 on a used model. The government is doing this to boost sales on these vehicles.
Please don’t think that this is automatic. In order to qualify, the following criterion must be met.
1 – The electric vehicle or plug-in must have been manufactured in the US under the qualifications of the Inflation Reduction Act.
2 – New SUV’s, vans, and trucks must have a sticker price below $80,000.
3 – New automobiles must be priced below $55,000.
4 – Used vehicles can’t have a tag above $25,000.
5 – If single, the buyer must have an income below $150,000 in either the year of purchase or the year before.
6 – If married, that income level becomes $300,000 on an MFJ.
7 – Head of Household filers must have earned less than $225,000.
Taxpayers who qualify can take the credit regardless of how much income tax they may owe either at the time of purchase or when they file their return. But if you take the credit at the dealership and don’t qualify, you’ll be forced to pay it back when your returns are filed. Given this fact, I can already see how this is going to turn into a nightmare for many.
Buyers wanting to get their financing down will say just about anything to qualify for a loan. Unscrupulous car salesmen will also say anything necessary to earn a commission.
Of course, it’s left up to the lowly tax accountant to properly enforce the law and tell that taxpayer the bad news at tax time. Isn’t this going to be fun.
Let me leave you with this.
We’re coming close to October 16th, the extension filing deadline for C Corps, Estates, Trusts, and Personal Income Tax Returns. If your final work isn’t into us already, please use this weekend to get us what we need. No one needs to pay any Failure-to-File Penalties.
This time of year, we always handle a rather strange anomaly. It happens every year, and is as common as the tides or the cooler weather of fall. I’ve always called it the…
I-Hate-Taxes-So-I’m-Going-To Wait-Till-The-Last-Possible-Minute Phenomenon.
If you aren’t one of my regular clients and you’ve been thinking about a change, please call us today. Now is the perfect time to act.
I’ll complete a complimentary tax planning session for you, your family, and your business. I’ll also answer any questions you may have and write a quotation for any accounting work that’s necessary. If we can get going right away, we’ll even have the time to get work done before Tax Season begins.
And, because you’re such a close personal friend, I’ll even give you a 33% discount on your first six months of bookkeeping and/or 3 months of our electronic payroll service for free. OMG. Such a deal. Christmas in October.
But wait. There’s more…
Before this turns into yet another cheap infomercial, I’ll stop there. Seriously, we’d love to help. Please call us today.
We’re all going to get through this. Let’s get through it together.
As an inducement, we’re offering 33% off your first six months of bookkeeping and / or the first three months of electronic payroll services on a complimentary basis. In order to claim this benefit, please click on the appropriate button below and provide your contact information. We’d love to help.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Accounting Solutions Ltd.
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