[TurtleBoy]

Originally Posted by IS350

"Depending on your liability and other tax credits you take, you may not see the full tax savings of the tentative credit you calculate on Form 8936. This is because the credit is a nonrefundable credit. Nonrefundable tax credits cannot reduce your tax bill below zero and also reduce your tax bill for a number of other credits taken before reducing the remaining tax bill for your plug-in electric motor vehicle credit."

Guessing this means if I apply marriage and child credit and have no remaining tax Bill, the $7,500 EV credit is unusable?

Your statement is correct but what are you referring to when you say marriage tax credit?

[IS350]

Originally Posted by TurtleBoy

Your statement is correct but what are you referring to when you say marriage tax credit?

Thanks, I'm referring to the $24,800 deduction for married couples filing jointly. There's also a $2,000 credit per child. As I understand, those need to be applied prior to any EV credit.

[Spencer518]

Originally Posted by IS350

Thanks, I'm referring to the $24,800 deduction for married couples filing jointly. There's also a $2,000 credit per child. As I understand, those need to be applied prior to any EV credit.

The $24,800 is a deduction from your combined gross income. It is not a dollar for dollar tax credit like the $7,500 is

[IS350]

Originally Posted by Spencer518

The $24,800 is a deduction from your combined gross income. It is not a dollar for dollar tax credit like the $7,500 is

Thanks, right.
Actually, when I entered the $7,500 deduction in my 2019 TurboTax file it wasn't dollar for dollar, either.

[Clippers015]

Originally Posted by IS350

Thanks, right.
Actually, when I entered the $7,500 deduction in my 2019 TurboTax file it wasn't dollar for dollar, either.

THere is something you did wrong then. The $7500 is not a deduction but a tax credit. A deduction is anything that reduces your gross income, like retirement investment, healthcare costs, standard deduction (single or married). So while a deduction is not a dollar for dollar, the $7500 credit will be.

The $7500 is an actual tax credit that is applied against any owed taxes. You can not use the $7500 if your tax outstanding is a negative. Just because you get a refund after you file might mean, you could get a bigger refund. You are basically prepaying your taxes through your monthly paycheck prior to Dec 31 to Uncle Sam. To estimate your tax burden, just figure out your gross, quickly go through your deductions, see how much is taxable and then apply to the tax brackets. Hopefully you have $7500 or more and all of that can be applied and you are golden!

[IS350]

Originally Posted by Clippers015

THere is something you did wrong then. The $7500 is not a deduction but a tax credit. A deduction is anything that reduces your gross income, like retirement investment, healthcare costs, standard deduction (single or married). So while a deduction is not a dollar for dollar, the $7500 credit will be.

The $7500 is an actual tax credit that is applied against any owed taxes. You can not use the $7500 if your tax outstanding is a negative. Just because you get a refund after you file might mean, you could get a bigger refund. You are basically prepaying your taxes through your monthly paycheck prior to Dec 31 to Uncle Sam. To estimate your tax burden, just figure out your gross, quickly go through your deductions, see how much is taxable and then apply to the tax brackets. Hopefully you have $7500 or more and all of that can be applied and you are golden!

Thanks, I was owed money, but after entering the credit, it stated I could use $7300 of it, and it increased my refund amount about $4k.

[Penguino]

Originally Posted by IS350

Thanks, I was owed money, but after entering the credit, it stated I could use $7300 of it, and it increased my refund amount about $4k.

Thought you were leasing it?

[TurtleBoy]

Originally Posted by Spencer518

The $24,800 is a deduction from your combined gross income. It is not a dollar for dollar tax credit like the $7,500 is

Taxable income, not gross.

Edit: For clarity they do refer to adjusted gross income on the tax forms but it is actually the adj gross taxable income since the wages on the W2's are taxable wages.

[IS350]

Originally Posted by Penguino

Thought you were leasing it?

Was trying to stay open-minded. 🤣