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Prepayment Options to beat the Tax man

PAsted this over on the TMC forum but thought I might see if anyone else here has any ideas on this:

Anyone think that Tesla would be open to prepayment options for those that are looking at taking delivery in Q1 of 2013 but might want to get the tax benifit for 2012? Would be nice not to have to wait a whole year to get that credit back

My understanding is that the tax credit is based on the in-service date, not the payment date.

jerry;
Since TM collects payment in full on delivery, aren't they the same in this case?

They should be, but some car dealers have been known to back-date the in-service date. I doubt Tesla will do this, but it's not uncommon among car dealers to do so. Several Prius group members have been surprised to find out that their warranty ran out before they thought it would based on the delivery date.

Not an option in this case. http://www.irs.gov/pub/irs-pdf/f8936.pdf Line 3 "Enter date vehicle was placed in service". That would normally be the date your Model S was delivered, regardless of when you paid for it. In this case, Tesla takes payment upon delivery.

My estimated delivery is Dec/Jan. If it comes after the first of the year, I will calculate my estimated Federal taxes for 2013 and reduce my withholding to compensate for the $7500 credit.

"My estimated delivery is Dec/Jan. If it comes after the first of the year, I will calculate my estimated Federal taxes for 2013 and reduce my withholding to compensate for the $7500 credit."

Yeah, we will probably do the same, just not quite the same reducing the withholding over months to get the same bang as the whole deduction at once.

Oh well, thanks all.

Nice thread. Thank you for the info.

"Yeah, we will probably do the same, just not quite the same reducing the withholding over months to get the same bang as the whole deduction at once."

Well, you can do it in as little time as you pay $7500 in taxes. Just have your withholding be $0 until you get up to what would be a $7500 liability. I would think for many owners (especially Signature owners) that would be within a month.

One thing you are all assuming is if you take delivery in 2013, there is absolutely zero tax credit in 2013 as of right now.

You can also bet if Obama is not re-elected, the tax credit is highly likely to disappear. If he is re-elected, then it's a good bet it will continue.

BUT make no mistake, a 2012 tax credit is only and exactly that.
So you can reduce withholdings and what not, but you may still end up not getting it.

Scions. Why would the Republicans due away with the republican tax credit? What does that have to do with Obama?.

#3562 and 40kw here estimating a 24 Dec delivery.
If that est. sticks, great! I float $7500 for 45 days or so. If it slips to 2013 and the credit continues (which we'll know by then), I'll excersise my one time 6 month deferral for a July delivery. I don't want to float $7500 for the entire year.

Crusoe, don't be so sure we'll know by 2013 whether the credit will continue through 2013. There were several tax changes mid-year 2012 that affected tax liability for 2012...

Unfortunately the Republican party seems to have associated being environmentally friendly as being bad for business. This mantra repeated by the likes of Rush Limbaugh has convinced the Republican masses that this is a fact. There is no logical reason why they have this misplaced belief and in fact investing in green technology will only be a benefit to our economy.

That said I also feel that the Republic candidates being offered up in November will be very happy to remove this incentive as an offering for the radical right.

Murray, why did the republicans put our $7500 tax credit on the books..? Why did obama's proposal limit the deduction to a 40,000 dollar auto? You should quit listening to rush. There are better places to get your news.

You can always file an amended tax return to get your money back faster.

On many of these tax credit threads, some folks seem to be confused on the tax credit. To be clear, the tax credit currently has no expiration date. Each manufacturer can sell 200,000 qualified vehicles (after 2009) before they start the phase-out period of the tax credit.

That being said, at any time, Congress can change the law; however, given the miniscule about of these tax credits, I find it highly unlikely that either side of the aisle will focus on cutting this specific tax credit... at least I hope they don't.

My best guess is that I will take delivery of my Model S in February, so I will likely be waiting for the $7,500 credit for over a year. Hmpf.

marek, How do you file an amended return for a year in which you have not yet filed? That is the concern many of these folks are having. If delivery doesn't happen until after Dec 31 they can't claim the credit on this year's tax return. So then they have to wait until next years tax return to claim the credit.

One suggestion has been to lower your withholding early in the year to get the equivalent of the credit on your paycheck. I am not suggesting doing this as there are penalties for under payment if the credit were to be repealed.

My thought is that if you can afford the $5,000 reservation and have it sit for many months (or years in some cases), you can afford to wait for the $7,500 credit.

"Murray, why did the republicans put our $7500 tax credit on the books..? Why did obama's proposal limit the deduction to a 40,000 dollar auto? You should quit listening to rush. There are better places to get your news."

Yup, I get my news from Comedy Central! :D

"If it slips to 2013 and the credit continues (which we'll know by then)"

Actually we won't. The only time you'll know for sure is when the tax laws for 2013 are finalized and can't be changed anymore. The tax credit program may be on the books halfway through 2013, and then Congress might decide to cancel the program. So when you're filing your 2013 taxes in 2014, you'll know for sure whether you'll be receiving a credit for purchasing a Model S in 2013. Until then, you can't say with 100% certaintity.

@Longhorn92, you are right, there is nothing that says this tax credit will expire at the end of 2012. The reason some people are talking as if it will or might is because multiple legislators have expressed intention to push to cancel this tax credit, but let it ride for the 2012 tax year.

The credit has less % impact on Model S buyers than on purchasers of the Volt and Leaf.


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