Tax Credits

[ESA1178]

Hello all!

I live in California and would be taking advantage of the $7500 Federal Tax Credit, and also the $2500 CA.
My questions are:

1: Is the financing based on the out the door price? Or based on the anticipated calculated cost to buyer after rebates?

2: Are the credits applied at the time of sale, where the dealer takes the Federal/State off the price?

IE: My car is $24000 out the door. The dealer deducts $10000 from that amount and finances me the $14000 ?


Sorry for being such a dummy...

Mark

 

[danpatgal]

All the financing is done BEFORE those rebates and credits. So, if your "out the door" price is 24,000, that's what Mitsubishi will finance for you. When you get the $2500 rebate from CA in a few months and $7500 from the feds next Spring, you can do with it as you wish - or pay down your loan.

Similarly, you will pay sales taxes on $24000 (not $14000), so that will raise your "out the door" price a little.

If you lease your vehicle, I think the dealer technically owns the car, takes the rebates/credits, and you might get a lower lease rate as a result. This is something to look into if your primary focus is getting a monthly payment down low.

 

[danpatgal]

Oh, and incidentally, I got this calculation for a trade-in of my 2012 iMiev, which lowers the sale price, and thus taxes, from my local dealer:

$24,295
-12300--trade value

$11995
719.70--pa sales tax
189--tag and license

$12,903.70 out the door price

and you can do up to 60 months at 0% interest and 0.9% for 72 months

I calculated further ...

Fed Tax Credit -$7500
State Rebate -$2000
After tax return costs $3403.7
Before tax price $2684

So, to get a passenger heated seat, fog lights, and a few other upgrades, I'd pay $3,403.$70 out of pocket, once I get that tax credit next year. So far I'm not thinking it is worth the hassle.

 

[ESA1178]

Thanks for replying..
So the $7500 is actual cash back?
Or an amount I use to right off my taxes?
Not very IRS bright :mrgreen:
I the iMiev is not available for lease, which might have been
a better option for us....


Mark

 

[danpatgal]

No, the $7500 is a tax credit. If you will pay less than $7500 in federal taxes in 2014, you will not get that full amount. This is a problem with the credit, it tends to favor those who are at least middle class, or wealthier.

Also, to be clear, it is also NOT a deduction (reducing your taxable income), but a credit (reducing your tax liability). A credit is way better/simpler, so if you can use it, it is quite nice. See this thread for more discussion on that:

http://myimiev.com/forum/viewtopic.php?f=5&t=1548&start=20

Dan

 

[PV1]

Another thing, is the CA a 'rebate' or an 'incentive'? PA had a state rebate that I got for $3,000 (actually split between my co-signer and I), and they were actual checks in the mail to do whatever with. The Federal Tax Credit was applied to my Federal taxes, and paid for my yearly taxes, so I got what I paid in through the year back (which may or may not be the correct way it works, since I was the first person my tax person has done the EV FTC for). The federal credit goes through your taxes, it's not a direct check for the full amount.

If the state is a 'rebate', you'll get a check in the mail (and pay income tax on that if they're like PA), but if it's a tax incentive, you'll go through your state taxes to get it.

 

[ESA1178]

Thanks all!

It seems clear that leasing is the way to go for me...


Mark

 

[aarond12]

Texas is ready to start offering $2500 credits for EVs too. Interestingly, the full $2500 is only available for 48-month leases or longer. If you choose a shorter term, the rebate is less.

http://insideevs.com/texas-2500-rebate-finally-set-go-live/

 

[HumbleTurtle]

Dear All-

I've read around the forum a bunch and still am not clear on this.

I just purchased a (so excited!!!) 2012 iMiev ES @ 1000 miles on the odometer for 12900. They said it was used.

Does this make me ineligible for the tax credit? Or how do I find out if it was registered for the tax credit?

Thanks for your help!
Jon

 

[BillThompsonMIEV]

Only new untitled cars eligible for the federal tax credit.