Understanding the Prius Prime Tax Credit?

Line 44 would stay unchanged, but Line 63 would be reduced to Zero.

The Prime credit gets entered at Line 54, and subtracted out as you approach the bottom line of the section.

 

I don't know why people must make this so hard.
A tax credit is an offset against what you owe. Simple.

And no, you don't get any excess credit "back".
If the credit is more than your total tax liability, you just get back all of your withholding.

 

If your Line 37, Adjusted Gross Income, is $41,000 this time, my best guess this that your Prime credit will be $3290.

$42,000? Then $3410.

But please run this question past some other folks too, in case I missed something. I'm not a tax professional.

Your credit this year would be smaller than last year because the Trump Tax Cut is saving you some taxes.

 

Sorry, the definite answer is not $40k, it's $51k. That tax bracket that I linked to in the other thread is definitely wrong. Use a 2018 tax calculator to verify the $51k. If you make $41,046 again this year, your tax liability is only $3,295 and that's all you get. You lose out on the whole $4,502 you could get if you made over $51k. If you have 401k or IRA, talk to a tax pro so you can get more back.

 

[Didn't see that thread earlier.]

That link isn't wrong, it just looks like you didn't count in the Standard Deduction, which is $12,000 for a single taxpayer.

 

I would recommend that you talk to a tax person. I received the full credit last year. Something may have changed this year though. It is not a deduction it is a tax credit.

 

doogi, run this by your tax preparer...

 

I would put in for the tax credit wether you think you get it or not. Many people did not when the first HyBird vehicles came out. I used to own a Honda Civic Hybrid 2003/2004 time frame, I received money from State & Fed totally over 5000.00 Dollars. it took some recipes and a little paperwork. Total time 20 minutes .... doing the math that is 250 $ a minute. It was why I bought the car for one and Xmas just was a little late that year

 

You may also fine some insight to your question here. You have to remember that the IRS " LOVES SYMANTECS " just as us Engineering folks do.

Sometimes a cigar is just a cigar, other times it is a Cigar.

fueleconomy.gov/feg/taxfaqs.shtml

 

Is the $4500 credit--form 8936-- still available? HR Block just told me it is not!

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TurboTax says it is.
Filing Tax Form 8936: Qualified Plug-in Electric Drive Motor Vehicle Credit - TurboTax Tax Tips & Videos

 

How are Roth conversions affected? I was planning to do this tomorrow. Don't have much time to study.

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Find a real tax accountant with real credentials. HR Block is a joke. You'll get a different answer from each person that works there.

 

On soooo many levels THIS thread cannot be for real.

 

Roth Conversion bumps up your taxes owed, so the $4500 tax credit really helps and could allow more conversion.

One typical Roth Conversion strategy is to make sure you are at least at the max of the 12% tax bracket income. With the Prime tax credit, you could extend that further into the 22% income bracket and use the credit to offset the extra taxes.

 

What does this have to do with an IRA conversion ? Likely nothing.

Except that a Roth conversion is treated as earned income and the tax credit could off-set part of it.

 

Right you are. I already got a second answer from a second person. So how do you find a real tax accountant with real credentials?

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I thought I was replying to a comment about Roth conversions being more complicated with the new tax rules. I'm new to the Forum and I maybe mis- posting. The basic strategy would have been to roll money from a pre-tax account like a traditional IRA into a Roth IRA. But it wouldn't have to go into a Roth IRA could go to cash or whatever. This is a good idea I think for those who could not otherwise take the entire $4,500 credit.

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Moving money from a traditional IRA to get the full value of the EV Tax credit will cause you to pay a lot more in state taxes though

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