Quorn
Member
If you use your annual conversion of Traditional IRA funds to a Roth IRA you will incur income tax at your marginal rate Plus a 10% penalty if you are under 59 1/2.
EV Tax credit and Tax Software.
- Thread starter ColdCase
- Start date
- Replies 122
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Urbanengineer
Active Member
just taxes if you recharacterized as a Roth IRA, but you had to make said withdraw before Jan 1, 2022.
David Comstock
Member
I read somewhere else that the 30% Federal tax credit for EVSE and install expired in 2021 - so for those like me that just put our orders in for the '23 SE wont qualify, does anyone know if this is true? Being my first EV I'm still learning about all the state and fed tax incentives for EVs thx!
I believe the EVSE tax credit has expired, but your 2023 SE will come with a 120V/240V 32-Amp FlexCharger that can charge your SE as fast as any EVSE you can buy--provided you have a 240-Volt outlet that can supply 32 Amps.
David Comstock
Member
Got it thank you for clarifying. I don't currently have 240v outlet and need to get one installed. I haven't yet called around to see what this would cost but is the install of the outlet a tax write off? Thanks again!
Urbanengineer
Active Member
No, at this time there is no tax credit. Until build back better or w/e passes in some form, there is no home alt fuel refueling tax credit. you should wait to purchase any materials or pay an electrician as you will not get a 30% rebate at this time. If it ends up being retroactive, it will work in your favor.
Up to you.
MichaelC
Well-Known Member
Do check with your electricity provider, though, as some offer rebates/incentives for EVSE installations.
True. However, David should check to see if his local utility company offers any money toward installing an EVSE and 240 circuit if he hasn't already done so.
Jim In Tucson
Well-Known Member
Also check your state incentives. Some states are offering EVSE at least a partial incentive.
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Newkirk
Active Member
It seems from this thread that at first, Turbo Tax didn't have Form 8936 (for the $7500 credit) available, but that it's available now. I also searched and it does seem to be available. Can anyone who did their taxes with Turbo Tax recently confirm if they were able to get the $7500 credit using Form 8936? Thanks!
Teddydogno1
Active Member
I submitted my return using TurboTax and it was accepted by the IRS on 3/23. Have not actually gotten my refund yet, though.
Rob
Rob
ColdCase
Active Member
I think it was the Federal 8911 form that was late being incorporated into their software, the one for credit for installing an EV charger. I think form 8936 for the $7500 credit was always included.
Anyway I submitted my return just after TurboTax notified me the forms were incorporated into the software, the IRS accepted it, and I received all the credits due to me by March 22nd.
If you didn't pay enough taxes to get the credit, TurboTax won't let you claim it or all of it.
Anyway I submitted my return just after TurboTax notified me the forms were incorporated into the software, the IRS accepted it, and I received all the credits due to me by March 22nd.
If you didn't pay enough taxes to get the credit, TurboTax won't let you claim it or all of it.
Urbanengineer
Active Member
TurboTax will only let you collect up to your federal tax liability, which for lots of us unfortunately is not $7500.
but. Yes, the tax credit is available.
but. Yes, the tax credit is available.
Don't forget the best way to bump up your tax liability is to convert regular IRAs to Roth IRAs. Then you never pay taxes on those IRA dollars and you don't have to take a required minimum distribution later on.
Whosehouse
New Member
Used turbo tax and waited like three weeks before it let me submit bc of the car form and the charger form.
Once cleared, it went through and I got my money last week through direct deposit.
Once cleared, it went through and I got my money last week through direct deposit.
Jim In Tucson
Well-Known Member
Please point me to a very clear explanation of this theory. I don’t understand the benefit, assuming there is one.
I’m fairly astute at investing, etc., but I simply don’t see the benefit of IRA to Roth conversions.
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chrunck
Well-Known Member
Traditional withholdings are pre-tax and thus lower your tax burden because you aren't being taxed on that money. If you make $75k and put $10k in a traditional 401(k), you will be taxed as if you made $65k. This means that you'll owe less in taxes for that year. You won't be taxed on that $10k until you withdraw it in retirement.
Roth withholdings are post-tax, and thus don't affect your tax burden. If you make $75k in a year and put $10k into a Roth 401(k), you'll still be taxed on your entire income, meaning you pay more in taxes now. When you withdraw from your Roth 401(k), you don't pay taxes on that money because you already paid taxes when you earned it.
Traditional withholdings lower your tax burden dollar for dollar, which is great in the short term because you owe less in taxes, but you're really just shifting the bill down the road. Roth withholdings will increase the amount of taxes you pay now, which gives you more ceiling for these types of tax credits.
I don't know if all employers have both traditional and Roth retirement plans, but mine allows me to adjust how much I contribute to each, up to the federal maximum.
If you, like me, don't earn enough to owe $7,500 in federal income tax, you need a way to bump up your tax bill. One way to incur more taxes is to convert regular IRA dollars to Roth IRA dollars. If you already owe at least $7,500 in federal taxes, however, this ploy offers no monetary benefit.
By paying off the deferred regular IRA taxes with the EV tax credit, you're ending up with Roth IRAs for which you'll never have to pay taxes when you cash them in. Also, the feds force people with regular IRAs to take a required minimum distribution when they get into their 70s--they want those deferred tax dollars. Then you have the choice of spending that Roth IRA money or leaving it to your heirs--and they won't have to pay taxes on it, either (although they have to spend it within 10 years after inheritance).
I'm not a tax accountant, so you should check with yours to determine if everything I wrote is true, but we've taken the full $7,500 tax credit with the help of converting IRAs to Roth IRAs for both our Honda Clarity PHEV (which has a large enough battery to qualify for the full $7,500), and our MINI Cooper SE.