PSA: You may not get the full EV tax credit if you're comparing 2017 taxes

  • Thread starter Thread starter Electra
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Electra

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It's almost the end of the year so put all your ducks in a row so you will get the full EV tax credit. It seems like the new tax code benefited families with kids. So if your income is less than $400K combined, you'll get $2000/child under 17. The standard deduction for married couples increased to $24,000 from $12,700. You can use TurboTax (or probably any other program) online for free to estimate your 2018 tax liability. You'll only need to pay to file your taxes. They do not have the EV tax credit available yet, but just use it to calculate your tax liability. If you don't have enough tax liability contact a tax pro to see what options you have like Roth IRA conversion.
 
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To explain the "Roth IRA conversion," it moves some of your 401k tax deferred money to another retirement account by paying the previously avoided income tax. Other issues:
  • Check your tax rate as you might have to pay a higher rate, 25% instead of 12%.
Bob Wilson
 
Mike L said:
To clarify: Small families (1-2 kids) benefited, larger families get less generous treatment by the new tax code than the previous baseline.
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You're right but it also benefited families with kids that made just over $100k. These couldn't get any credits at all before.
 
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