4 ms·
It's a credit yes, but it's not a refundable credit. Which means you need to owe at least that amount of tax. So for 2016 that means a single person has to ea
by dasil003 9y ago
It's a credit yes, but it's not a refundable credit. Which means you need to owe at least that amount of tax. So for 2016 that means a single person has to earn at least $46,900 to get the full benefit (assuming no other non-refundable credits). The median US personal income for 2016 was about $31,100, so I think it's fair to say the majority of Americans can not take full advantage, although I agree with your last statement.
- MaysonL 9y agoThat's 46,900 after exemptions and deductions. 6k standard deduction & at least one 4K exemption.
- seanmcdirmid 9y agoThat number is deceptive: a married joint-filing income would be around $60k, so they would qualify if they only bought one of these.
- bzbarsky 9y agoFor married-filing-jointly you need a gross income of at least $76,800 in 2017 to owe $7500 in federal taxes.
- seanmcdirmid 9y agoWhat table are you using?
- dasil003 9y agoAccording to the brackets at https://www.forbes.com/sites/kellyphillipserb/2017/10/19/irs-announces-2018-tax-brackets-standard-deduction-amounts-and-more/#1202a8a4273b https://www.forbes.com/sites/kellyphillipserb/2017/10/19/irs..., and assuming the $13000 standard deduction, I work out $69350 to owe $7500.
- bzbarsky 9y agoDid you forget the $8k or so of personal exemptions?
- bzbarsky 9y agohttps://taxfoundation.org/2017-tax-brackets https://taxfoundation.org/2017-tax-brackets table 2. To get to $7500 in tax you need to have (7500-1865)/.15 + 18650 = ~$56,000 of taxable income. For married filing jointly, standard deduction (same page, table 4) is $12,700. Two personal exemptions (same page, same table) is $8,100. So the total is about $76,800.
- seanmcdirmid 9y agoOk, I was using a simple tax calculator, I thought it already accounted for standard and personal deductions, but I guess not.
- djrogers 9y agoI’m guessing the logic was that someone making less than $50k wouldn’t be buying a $30k vehicle...
- dasil003 9y agoHence my last clause.