My Total Rebate pile (California Purchase)

[ARK]

I guess with how slow the CA CVRP rebate occurs, sounds like it's certainly possible like you say since you send the rebate request in so long ago (I hear it's over 6 months to process?).

This is why my opinion has always been rich (well off people) are sorta impossible to tax regularly because they have a lot more options/flexibility/$$/power when it comes to how tax laws work.

Just how it is so it's almost a waste of time for government to fight it. Why they just tax the masses (low/middle class) and call it a day.

I don't begrudge OP for taking what was available - I would have done exactly the same in his position. But yeah, you would think the program would somehow take into account net worth. Very different thing when someone is working full-time while earning minimum wage versus someone who was a medium/high earner and has gone through life and successfully set aside so much money that they no longer need to work to maintain their standard of living without working for decades to come.

Sponsored

 

[DevSecOps]

This is where planning come in. My tax return that the California rebate was based on was my 2019 tax return. I qualified since I was on Social Security that year and that was my only income. In 2020 I took a withdrawal from my 401(k) that would tax me enough to cover the anticipated tax to make sure that I would get all of the $7500 fed credit.

In short I got the Calif. rebate based on 2019 tax return and will be getting the Fed tax credit based on 2020 tax return. And yes I do have a very good Tax guy.

I'm not in the camp of people who give 2 #$% about your money and the more you can make and get away with legally I applaud you. Generally speaking however, I think rebates for EV's are asenine. Just be careful, you are on an EV forum where there's a good 50% or more of people who probably have to seek psychiatric help now that you've explained yourself.

 

[mburtsvt]

I'm not in the camp of people who give 2 #$% about your money and the more you can make and get away with legally I applaud you. Generally speaking however, I think rebates for EV's are asenine. Just be careful, you are on an EV forum where there's a good 50% or more of people who probably have to seek psychiatric help now that you've explained yourself.

Could not agree more. At the end of the day even if there were no rebates at all it would not have changed my mind on getting the Mach E. This was a "perfect storm” situation that I could take advantage of. I would be financially stupid if I did not.

 

[RedStallion]

I'm not in the camp of people who give 2 #$% about your money and the more you can make and get away with legally I applaud you. Generally speaking however, I think rebates for EV's are asenine. Just be careful, you are on an EV forum where there's a good 50% or more of people who probably have to seek psychiatric help now that you've explained yourself.

As they say, the road to hell is paved with good intentions. Even when government interferes in market operation with good intentions the result is always bad. They tried to make it better and it turned out as usual.

 

[generaltso]

I only rate the 2020 planning as “ok” because if you didn’t need the cash from the 401k distribution you should have done a Roth conversion instead.

Not all 401Ks allow converting existing funds to Roth.

 

[Mr67gta]

You get that this is California - everyone has a larger tax liability. In addition - in my case I sold stock and CREATED a tax liability to make sure I get ALL OF THE CREDIT. It's the American way. Oh and by the way - I am a retiree - with a very good finance guy.

That's what I'm going to do, take money out of retirement account and apply the $7500 credit so I won't pay taxes on it.

 

[jlauro]

... At the end of the day even if there were no rebates at all it would not have changed my mind on getting the Mach E. ...

That is probably true many. That said, I am not certain I would of went with the Mach E without the $7500 rebate. The $7500 did make the Mach E a lot more attractive than the model Y, and even if I don't want a Tesla (one of the few that prefers dealers over sparse Tesla locations), I probably would of decided to wait a 2 or 3 more years for some of the alternatives to come out. In some ways I picked up a car early so less risk of missing out on the $7500 rebate...

 

[Malacandra]

As they say, the road to hell is paved with good intentions. Even when government interferes in market operation with good intentions the result is always bad. They tried to make it better and it turned out as usual.

In that case, we should get rid of all patents and copyrights wherein the government imposes artificial monopolies upon free markets. To say nothing of SEC regulation of securities.

Because the result is always bad.

 

[jlauro]

In that case, we should get rid of all patents and copyrights wherein the government imposes artificial monopolies upon free markets. To say nothing of SEC regulation of securities.

Because the result is always bad.

Although I agree government intervention in markets is often bad, and too slow to respond, it's incorrect to say the results are always bad. The abuses of new entries in the market would cause far more problems without many of the regulations.

 

[Malacandra]

Although I agree government intervention in markets is often bad, and too slow to respond, it's incorrect to say the results are always bad. The abuses of new entries in the market would cause far more problems without many of the regulations.

I knew I should have used the sarcasm font…

 

[yngwenli]

Could not agree more. At the end of the day even if there were no rebates at all it would not have changed my mind on getting the Mach E. This was a "perfect storm” situation that I could take advantage of. I would be financially stupid if I did not.

This works because there is nothing tying the CA CVRP rebate and the federal tax credit/rebate. They are completely different systems administered by different parties. There is also a massive lag with the CA rebate so it took OP 8 months to file/get it. You can always file in Apr 2021, say your 2020 taxes are not done yet, then use 2019, etc...file an extension even and send 2020 taxes in on Oct 2021 .

Still, this won't be possible for everyone and mburtsvt's use case is not going to work for 99% of the people out there.

I'm all for OP taking advantage of any tax laws that are legal and works in your favor, but again, this won't work for someone making say $150k+ every year for the last 5 years, etc...or the opposite, someone making 25k a year.

I'm still for the government not "worrying" about these 1% strange cases, but like others have stated and I added as well, when you have tons of assets or can increase/decrease income AGI, etc...it's hard for the government to close these and honestly, the federal government doesn't care you had a $4.5k rebate from CA since it wasn't funded by them.

This is why other countries have VAT for like everything. They figure the rich spend more $$ since they simply have more $$.

 

[yngwenli]

I don't begrudge OP for taking what was available - I would have done exactly the same in his position. But yeah, you would think the program would somehow take into account net worth. Very different thing when someone is working full-time while earning minimum wage versus someone who was a medium/high earner and has gone through life and successfully set aside so much money that they no longer need to work to maintain their standard of living without working for decades to come.

The best way in the american tax system is 1 spouse works a "regular" w-2 job, the other spouse has a business. As much as I don't like those scam financial people, it's something they bring up a lot because yes, businesses are taxed differently than an individual.

If someone sets up a corporation and write off all health benefits/costs since the w-2 job has bad benefits, this is a massive tax cut since it's taken before any company profits/etc...that someone has to pay for at that bad W-2 job maybe with bad plans. Add in tons more in retirement sheltering vs. typical 401k, etc...

 

[Mach1E]

I don't begrudge OP for taking what was available - I would have done exactly the same in his position. But yeah, you would think the program would somehow take into account net worth. Very different thing when someone is working full-time while earning minimum wage versus someone who was a medium/high earner and has gone through life and successfully set aside so much money that they no longer need to work to maintain their standard of living without working for decades to come.

While some system taking net worth and income might be ideal to “get benefits to those who need them most,” there is a very good reason why they use only income:

It’s extremely easy to draw a line and determine who qualifies and who doesn’t, and there is already a system in place to do so: tax returns.

It’s also why they use income for the ACA health credits.

Systems that have to calculate and use net worth are absolutely horrible and slow. Medicaid is a perfect example. Takes months to qualify and figure it all out.

But income? A simple line item on a tax return. Fast and simple.

 

[phil]

While some system taking net worth and income might be ideal to “get benefits to those who need them most,”

Yes, if only there were some system that could more directly take the money from those who have it, and give it to those who need it most.

What might we call such a system?

 

[Mach1E]

Yes, if only there were some system that could more directly take the money from those who have it, and give it to those who need it most.

What might we call such a system?

I see what you did there. ?

Still, any system trying to use net worth is going to be horribly inefficient.

Sponsored