3 ms·

Also it is a tax credit.. meaning you only get the $7,500 if you actually owe at least $7,5000.. AFTER the standard deduction. Basically, anyone with under ~$10

Also it is a tax credit.. meaning you only get the $7,500 if you actually owe at least $7,5000.. AFTER the standard deduction. Basically, anyone with under ~$100k annual income would not even receive the whole credit, if any at all.

NoPiece 9y ago
"Tax credits are subtracted not from taxable income, but directly from a person’s tax liability; they therefore reduce taxes dollar for dollar. As a result, credits have the same value for everyone who can claim their full value." http://www.taxpolicycenter.org/briefing-book/whats-difference-between-tax-deductions-and-tax-credits http://www.taxpolicycenter.org/briefing-book/whats-differenc...
- maxerickson 9y ago
  Right, they are talking about the situation where someone only owes $6,000 in taxes. They get a $6,000 tax credit. So setting aside whether this is fair or unfair, people that owe more taxes clearly get a bigger benefit from the credit.
- rukittenme 9y ago
  The poor don't have taxable income. You can only claim the credit if you itemize which is restricted to even higher tax brackets.
  - maxerickson 9y ago
    No need to itemize, it is reported on line 54 and offsets line 44: https://www.irs.gov/pub/irs-pdf/f1040.pdf https://www.irs.gov/pub/irs-pdf/f1040.pdf But lots of people don't end up paying $7500 in income taxes.
throwaway2016a 9y ago
It's actually close to $50k before you owe that much after standard deduction... $100k would be closer to $18k taxes. Also, you don't need to take it all one year. Tax credits carry forward up to 10 years.[1] [1] Disclaimer, I am not an accountant
r00fus 9y ago
You get 100% of this credit passed on to you (cut right out of your negotiated amount) if you lease for 36mo. That's they way to get inexpensive electrics - lease and then keep it if you want it after 3 years.

3 ms·

Also it is a tax credit.. meaning you only get the $7,500 if you actually owe at least $7,5000.. AFTER the standard deduction. Basically, anyone with under ~$10

by Cshelton 9y ago

NoPiece 9y ago
"Tax credits are subtracted not from taxable income, but directly from a person’s tax liability; they therefore reduce taxes dollar for dollar. As a result, credits have the same value for everyone who can claim their full value." http://www.taxpolicycenter.org/briefing-book/whats-difference-between-tax-deductions-and-tax-credits http://www.taxpolicycenter.org/briefing-book/whats-differenc...
- maxerickson 9y ago
  Right, they are talking about the situation where someone only owes $6,000 in taxes. They get a $6,000 tax credit. So setting aside whether this is fair or unfair, people that owe more taxes clearly get a bigger benefit from the credit.
- rukittenme 9y ago
  The poor don't have taxable income. You can only claim the credit if you itemize which is restricted to even higher tax brackets.
  - maxerickson 9y ago
    No need to itemize, it is reported on line 54 and offsets line 44: https://www.irs.gov/pub/irs-pdf/f1040.pdf https://www.irs.gov/pub/irs-pdf/f1040.pdf But lots of people don't end up paying $7500 in income taxes.
throwaway2016a 9y ago
It's actually close to $50k before you owe that much after standard deduction... $100k would be closer to $18k taxes. Also, you don't need to take it all one year. Tax credits carry forward up to 10 years.[1] [1] Disclaimer, I am not an accountant
r00fus 9y ago
You get 100% of this credit passed on to you (cut right out of your negotiated amount) if you lease for 36mo. That's they way to get inexpensive electrics - lease and then keep it if you want it after 3 years.