Alert regarding the Federal Tax Credit of up to $7,500

[Mr. Mach-E]

So many members of this Forum have posted or are under the impression that they will receive the Federal Tax Credit of up to $7,500 next year.
While this may be true from a technical standpoint as it will be vested so to speak when you file your 2021 tax return. However, you can claim the credit in 2021 by adjusting your withholding this year. See your tax advisor or take your 2020 tax return, ask yourself if there will be any significant income or deduction changes for 2021, and then do a “what if” tax return for 2021. See how much your employer is taking out in Federal Income Taxes by week, month, or whatever. Adjust your witholdings or your estimated payments so that when your Mach-E arrives you have or will soon have the $7,500 by not already paying it to Uncle Sam and then having to wait for it next year when you file your 2021 return. My Mach-E should arrive in the first Q and I already have held back my $7,500 in estimated payments. Cha-ching!

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[mburtsvt]

So many members of this Forum have posted or are under the impression that they will receive the Federal Tax Credit of up to $7,500 next year.
While this may be true from a technical standpoint as it will be vested so to speak when you file your 2021 tax return. However, you can claim the credit in 2021 by adjusting your withholding this year. See your tax advisor or take your 2020 tax return, ask yourself if there will be any significant income or deduction changes for 2021, and then do a “what if” tax return for 2021. See how much your employer is taking out in Federal Income Taxes by week, month, or whatever. Adjust your witholdings or your estimated payments so that when your Mach-E arrives you have or will soon have the $7,500 by not already paying it to Uncle Sam and then having to wait for it next year when you file your 2021 return. My Mach-E should arrive in the first Q and I already have held back my $7,500 in estimated payments. Cha-ching!

Or as in my case...take a IRA withdrawal (if you are eligible), to cover the tax on the withdrawal. In my case based on 2020 return the amount was around $35K. Moved to the regular brokerage account and there it sits, for now.

 

[jeffdawgfan]

Or as in my case...take a IRA withdrawal (if you are eligible), to cover the tax on the withdrawal. In my case based on 2020 return the amount was around $35K. Moved to the regular brokerage account and there it sits, for now.

Sounds like me. Pulling 35K out of an IRA for a down payment. Figure gov't will take 20% off the top of that. Should get all that back with the Tax Credit next year.

 

[mburtsvt]

Sounds like me. Pulling 35K out of an IRA for a down payment. Figure gov't will take 20% off the top of that. Should get all that back with the Tax Credit next year.

You are my hero.......

 

[Bookworm214]

Sounds like me. Pulling 35K out of an IRA for a down payment. Figure gov't will take 20% off the top of that. Should get all that back with the Tax Credit next year.

Sold some stock and pulling money out of an IRA, figure it should even out.

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