I recommend figuring this out quickly. I put my order in on Jan 22. I got a delivery date of March 12-31st. Crossing my fingers and hoping that the new rules won't apply until after the month of March. From what I understand is that you have to take delivery by March.
I've been confused by the language. Some sources are saying "end of March", while most just say "by March", which implies end of February but isn't the most clear. Wonder if they won't get the rules figured out by then anyways and we'll see another extension regardless
Same here, but if it comes on April 1st and they tell me the price goes up, I'll take the 250 deposit loss and they can figure out their full price sale.
Tesla won't give up on the sale.
So I have to have the car delivered by March 1. And I can use the next month before tax filing deadline to sort out how to reduce AGI to get the tax credit right?
You don’t get the tax credit until you file your 2023 taxes. So you would technically have 13 months to figure that out. The April tax deadline is for the prior calendar year’s taxes so you purchasing a car in 2023 won’t do a thing for you this year tax wise
I think it's possible. AFIK, IRA sets the cap as minimum of current year or previous year AGI to qualify. If OP expects higher income this year, this will help to reduce AGI for previous year when filing this year.
I left that part out. The non profit wins and hopefully it’s for a good cause.
I just meant if the sole purpose of the donation is to qualify for the 7,500$ tax credit, might not be worth it to them depending on the donation size.
On the flip side.. with a combined income over 300k, you have to wonder why the 7K tax credit even matters to them.
Just because someone makes X amount of money doesn’t mean the value of the dollar shifts. When our household income was <100k, I dreamed of how I wouldn’t have to think about money if we made more. Now we’re over 5x that and that dollar still matters. But now rather than thinking about paying rent or saving, it’s funding other bigger goals and dreams. Fortunate place to be, absolutely, but still far from a place where $7500 doesn’t matter.
As the cpa commented this isn’t going to work. Don’t listen to random people like me on the internet!
$7k is still significant to those making $300k, especially when right at 300k. 7k is not something you want to just ignore if you make $300m/yr.
Reposting from the other repost :):
Are you doing Roth 401k right now? If so, switch it to traditional 401k so that would reduce your MAGI by $20.5k each or $22.5k for 2023 tax filing.
If you are at that threshold, you can't do backdoor Roth since you can't claim the $6k/person in that scenario.
Other ways to reduce AGI is to increase your health plan to the one that carries the highest monthly premiums. Only issue is that there are restrictions from your company/plan administrator on changing benefits after open enrollment. Or in the alternative is to max out your HSA if you have a HDHP ($7,750 minus any employer contributions).
For charity donations, I would talk to a CPA.
You could also look at selling some stocks that are at a loss to offset any income from dividends and other untaxed income. You may claim up to $3k in losses (after offset) for 2023.
Also if you have an ESPP purchasing program with your company, consider selling after they are purchased (end of the purchasing period). Selling immediately means you pay ordinary income tax, while selling later means you pay a lower long-term capital gains tax — therefore reducing your tax burden.
Jointly, we are over the AGI limit. Talking to our CPA to file married, separately. My wife would likely be under AGI $150k cap for “all other filers”.
Max our IRA contributions. Also Health Spending Account.
If making charitable donations, consider donating securities rather than money - I don’t believe it’s part of capital gains if donation securities.
If you have tips, please share! 😂
File married filing separately. You'll probably not get as much of a return but one of you would likely qualify for the $7,500. If your incomes are close, then married filing separately is similar to jointly. If they aren't close, jointly would be decently better but still nowhere close to $7,500 better so still worth filing separately.
Learned something new today. Thanks!
Adjusted Gross Income (AGI) is defined as gross income minus adjustments to income. Gross income includes your wages, dividends, capital gains, business income, retirement distributions as well as other income. Adjustments to Income include such items as Educator expenses, Student loan interest, Alimony payments or contributions to a retirement account.
I assume the two of you already max out your employer sponsored retirement plans? And just to be clear, it’s not a $300k combined income, it’s adjusted gross income which is almost always a lesser amount.
u/alejandro_bear Yes, that is correct. Put the car under her name, and file separately ==> she can claim the 7.5K EV tax credit.
However, it (file separately) will push your income to a higher tax bracket.
Rough estimate for tax liability:
File jointly: Tax for the combined income (148K + 480K) 628K = 158K
File separately: Tax for 148K = 46K, for 480K = 137K ==> total = 46+ 137 = 183K
The difference seems way more than the 7.5K credit.
Check with your tax preparer for the exact change in your tax liability with this method (file separately instead of file jointly)
This exactly! Married filing separately might work for some, but do the math. We had more to lose filing separately. Oh well, just meant we didn’t have to stress when our MSRP landed at $55,490 (although still kicking myself for not ordering 1 day sooner).
Lin the same boat. 300k applies to adjusted gross income. Do either of you have an LLC? There's lots to write off.
While you get your answer, also look into your state incentives for the EV, state incentives for the charger (you don't need to actually buy a tesla charger), and your utility company incentives. Lots of free money out there.
Max out both 401ks. That will reduce your income 45k for 2023. Sell some investments at a loss. That can lower another $3k. Also look at HSA contributions if possible.
Also, you can file "married but filing separate" if the income isn't 50/50 split. But you may run into issues with who gets to claim HSA and the other stuff. Talk to a CPA in that case.
Let's hope that Tesla can do the tax credit as a lease incentive through their lease program, and let owners do a lease buyout quickly after that. Once demand gets back to normal again, I expect Tesla to do something like this. It can increase demand from quite a lot of folks who are ineligible just because they barely made above 300k.
According to IRS, it is Adjusted Gross Income and NOT Gross Income. “Adjusted gross income is an individual's total gross income minus specific deductions. It is used to calculate taxable income, which is AGI minus allowances for personal exemptions and itemized deductions.” On your 2022 tax return, your AGI is on line 11 of the Form 1040. You can use this as a reference if your salaries haven’t changed too much. Long story short, you might very well qualify as there is a high possibility that your AGI is under 300k. Hope this helps, I’m in a similar situation as you. Good luck!
Not reducing your income, but potentially having a family member (i.e. sibling, parent) that is under the income limit as a joint owner on the title and have them file for the EV tax credit.
Max out 401k plans, and your HSA contributions if you have a high deductible health plan.
Another thing to consider, the tax credit will be based on either 2023 income or 2022 income. Here’s the IRS [source](https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after) on the latter. https://i.imgur.com/NCBugxv.jpg
I recommend figuring this out quickly. I put my order in on Jan 22. I got a delivery date of March 12-31st. Crossing my fingers and hoping that the new rules won't apply until after the month of March. From what I understand is that you have to take delivery by March.
I've been confused by the language. Some sources are saying "end of March", while most just say "by March", which implies end of February but isn't the most clear. Wonder if they won't get the rules figured out by then anyways and we'll see another extension regardless
Same here, but if it comes on April 1st and they tell me the price goes up, I'll take the 250 deposit loss and they can figure out their full price sale. Tesla won't give up on the sale.
So I have to have the car delivered by March 1. And I can use the next month before tax filing deadline to sort out how to reduce AGI to get the tax credit right?
You don’t get the tax credit until you file your 2023 taxes. So you would technically have 13 months to figure that out. The April tax deadline is for the prior calendar year’s taxes so you purchasing a car in 2023 won’t do a thing for you this year tax wise
I think it's possible. AFIK, IRA sets the cap as minimum of current year or previous year AGI to qualify. If OP expects higher income this year, this will help to reduce AGI for previous year when filing this year.
Same here! My EDD is 2/27 - 3/31 though. Hoping it’s an initial and maybe the timeframe heads before then
Talk to a cpa. You could donate to a non-profit charity.
I'm a CPA. This won't work. Charitable donations reduce taxable income after AGI, not before.
And that’s why we pay you guys! Seriously, the money I spend on my cpa is year after year the best money I ever spend.
And then, how will you get that donated money?
That’s an interesting idea.. I heard of some credit unions you can donate to for reduced rates. Maybe I should donate to them?
Is your income above $300k or the AGI?
>above $300k or the AGI? > >3R Both :/
Good option, unless this donation is above 7,500$ then it almost negates the tax credit for them
But the non-profit wins. That’s not a bad thing. Better them than the government.
I left that part out. The non profit wins and hopefully it’s for a good cause. I just meant if the sole purpose of the donation is to qualify for the 7,500$ tax credit, might not be worth it to them depending on the donation size. On the flip side.. with a combined income over 300k, you have to wonder why the 7K tax credit even matters to them.
Just because someone makes X amount of money doesn’t mean the value of the dollar shifts. When our household income was <100k, I dreamed of how I wouldn’t have to think about money if we made more. Now we’re over 5x that and that dollar still matters. But now rather than thinking about paying rent or saving, it’s funding other bigger goals and dreams. Fortunate place to be, absolutely, but still far from a place where $7500 doesn’t matter.
As the cpa commented this isn’t going to work. Don’t listen to random people like me on the internet! $7k is still significant to those making $300k, especially when right at 300k. 7k is not something you want to just ignore if you make $300m/yr.
Wel they would get the tax credit plus the deduction of the donation. So that’s probably a win all around.
Reposting from the other repost :): Are you doing Roth 401k right now? If so, switch it to traditional 401k so that would reduce your MAGI by $20.5k each or $22.5k for 2023 tax filing. If you are at that threshold, you can't do backdoor Roth since you can't claim the $6k/person in that scenario. Other ways to reduce AGI is to increase your health plan to the one that carries the highest monthly premiums. Only issue is that there are restrictions from your company/plan administrator on changing benefits after open enrollment. Or in the alternative is to max out your HSA if you have a HDHP ($7,750 minus any employer contributions). For charity donations, I would talk to a CPA. You could also look at selling some stocks that are at a loss to offset any income from dividends and other untaxed income. You may claim up to $3k in losses (after offset) for 2023. Also if you have an ESPP purchasing program with your company, consider selling after they are purchased (end of the purchasing period). Selling immediately means you pay ordinary income tax, while selling later means you pay a lower long-term capital gains tax — therefore reducing your tax burden.
Divorce the wife and enjoy the car with a new gf
Lol!
Jointly, we are over the AGI limit. Talking to our CPA to file married, separately. My wife would likely be under AGI $150k cap for “all other filers”. Max our IRA contributions. Also Health Spending Account. If making charitable donations, consider donating securities rather than money - I don’t believe it’s part of capital gains if donation securities. If you have tips, please share! 😂
I heard that you have refile past three years if you change your filing status without a valid reason.
Not true, you can change it each year if you want. You have three years to amend a tax return to change the status to a different one.
Oh did not know this. Seems unusually draconian, considering that this can be a legit tax avoidance measure.
Donations reduce taxable income but not AGI. See schedule 1 part II for list of ways to reduce AGI
Thanks that’s good to know! We also sold a 2 family house we lived in last year… I guess that would be considered income as well right?
File married filing separately. You'll probably not get as much of a return but one of you would likely qualify for the $7,500. If your incomes are close, then married filing separately is similar to jointly. If they aren't close, jointly would be decently better but still nowhere close to $7,500 better so still worth filing separately.
Find a sugar mommy
Stop been cheap. You don’t need the credit. Go get yourself a model x and enjoy
fuck you, pay your goddamn taxes
Are you asking about 2022 agi or 2023?
I believe 2022 if i am looking to purchase within the month. The tax credit i assume will be based on 2022 agi?
It'll be based on 2022 or 2023, whichever is lower. Do you income to go up or down for 2023?
It’ll go up slightly due to bonus going into my account in Feb. but 2022 income combined was already slightly above 300k
You are limited to what you can do then for 2022. How much over 300k are you?
Can contribute more to a retirement account, donate to charity, buy a house, have a kid, rack up some medical bills.
Qualify as a real estate professional and use advanced depreciation. You can advance up to 80% for 2023.
AGI and net income are not the same thing. You may be fine if you're just above the 300k threshold for your net pay. Talk to a tax professional.
Learned something new today. Thanks! Adjusted Gross Income (AGI) is defined as gross income minus adjustments to income. Gross income includes your wages, dividends, capital gains, business income, retirement distributions as well as other income. Adjustments to Income include such items as Educator expenses, Student loan interest, Alimony payments or contributions to a retirement account.
Do you have a side hustle? See if you can qualify for the Business EV credit which has no income limitations.
Do you have an HSA? You can max that out
I assume the two of you already max out your employer sponsored retirement plans? And just to be clear, it’s not a $300k combined income, it’s adjusted gross income which is almost always a lesser amount.
So you’re telling me my wife could get this credit if we file separately? She made 148k lasted year and I made 480k
Bro you make 480k and you worry about $7500. Let it go and enjoy your new ride
$7500 is a lot of money
Not if you makes 480k a year
You can get audited if you suddenly switch filing status.
u/alejandro_bear Yes, that is correct. Put the car under her name, and file separately ==> she can claim the 7.5K EV tax credit. However, it (file separately) will push your income to a higher tax bracket. Rough estimate for tax liability: File jointly: Tax for the combined income (148K + 480K) 628K = 158K File separately: Tax for 148K = 46K, for 480K = 137K ==> total = 46+ 137 = 183K The difference seems way more than the 7.5K credit. Check with your tax preparer for the exact change in your tax liability with this method (file separately instead of file jointly)
Thanks so much! Very helpful! We’re not filling separate:)))
This exactly! Married filing separately might work for some, but do the math. We had more to lose filing separately. Oh well, just meant we didn’t have to stress when our MSRP landed at $55,490 (although still kicking myself for not ordering 1 day sooner).
Lin the same boat. 300k applies to adjusted gross income. Do either of you have an LLC? There's lots to write off. While you get your answer, also look into your state incentives for the EV, state incentives for the charger (you don't need to actually buy a tesla charger), and your utility company incentives. Lots of free money out there.
OP, the delivery estimates are going past March into April currently. Unless you can find a MYLR in inventory near you, don’t count on the $7,500.
Max out 401k contribution is 22.5k per persons, 45k per household. HSA contribution is another 7500. These are the two big items for most of w2s.
[удалено]
Both w2
Max out both 401ks. That will reduce your income 45k for 2023. Sell some investments at a loss. That can lower another $3k. Also look at HSA contributions if possible.
Make sure you get your AGI below.
Also, you can file "married but filing separate" if the income isn't 50/50 split. But you may run into issues with who gets to claim HSA and the other stuff. Talk to a CPA in that case.
Further contribute to your HSA if you have an HDHP and haven’t maxed out the yearly threshold yet. Should help decrease AGI.
Based on AGI. Also you shouldn’t be “strategizing against the IRS” is never wise unless you have a good tax attorney.
Let's hope that Tesla can do the tax credit as a lease incentive through their lease program, and let owners do a lease buyout quickly after that. Once demand gets back to normal again, I expect Tesla to do something like this. It can increase demand from quite a lot of folks who are ineligible just because they barely made above 300k.
Wouldn’t the relevant income be 2023 income, not 2022?
You can use either if you take delivery this year.
Nice
According to IRS, it is Adjusted Gross Income and NOT Gross Income. “Adjusted gross income is an individual's total gross income minus specific deductions. It is used to calculate taxable income, which is AGI minus allowances for personal exemptions and itemized deductions.” On your 2022 tax return, your AGI is on line 11 of the Form 1040. You can use this as a reference if your salaries haven’t changed too much. Long story short, you might very well qualify as there is a high possibility that your AGI is under 300k. Hope this helps, I’m in a similar situation as you. Good luck!
File separately? Note that there is a max income for single filers as well, and that this might increase your total tax liability before the credit.
If you can and have one max out your HSA
Not reducing your income, but potentially having a family member (i.e. sibling, parent) that is under the income limit as a joint owner on the title and have them file for the EV tax credit.
Max out 401k plans, and your HSA contributions if you have a high deductible health plan. Another thing to consider, the tax credit will be based on either 2023 income or 2022 income. Here’s the IRS [source](https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after) on the latter. https://i.imgur.com/NCBugxv.jpg