Mach-E Lease Residuals Released For Q1 Are Impressive!

[macchiaz-o]

Please bear with me. My first post and a confused Brit living in NJ

I maybe brave enough to push the button on a Premium tomorrow. From what i can see there is no chance i would get a car in 2020.

My thoughts were to put down $12,500 deposit - Federal and NJ, but effectively i am having to find that $12,500 elsewhere for now until i get the check from NJ and a Tax rebate. I understand the NJ rebate may take a few months but effectively i need to wait until around April 2022 to see the benefits of the Federal. I would use the options scheme

Hope I am correct so far ?

As someone that has only filed returns for 2 years here in NJ i struggle to understand the Federal side. I file jointly with my wife and each year we tend to get a check back for a few thousand. So I really need some more tax liabilities to help get this $7500 back ?
We have just rx'd some inheritance and will be taking some money out of an their IRA in Jan and that will probably have $10k in tax owing. So does this help ? Sorry for the dumb question, i could ask our HR Block advisor but that will take a while

I don't see how you deserved that other response. At all.

Anyway... If your taxable situation were remaining the same next year as it's been for the last few years, then you could look at your "total tax" (basically your tax liability) from your previous few returns.

If your total tax minus other credits is above $7,500 then you'd have qualified for the full federal EV purchase credit. If your liability is less, than you qualify only up to the amount of that tax liability.

It has nothing to do with how much of a refund or how much you owe when you file.

If this is confusing, and especially since it sounds like you've got some extra complexities (e.g. inheritance), you should consider consulting with a Certified Public Accountant (CPA).

I am not a CPA. That said, given the inheritance and everything, I'm guessing you'll have no problem qualifying for the full $7,500.

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[Mopey]

Please bear with me. My first post and a confused Brit living in NJ

I maybe brave enough to push the button on a Premium tomorrow. From what i can see there is no chance i would get a car in 2020.

My thoughts were to put down $12,500 deposit - Federal and NJ, but effectively i am having to find that $12,500 elsewhere for now until i get the check from NJ and a Tax rebate. I understand the NJ rebate may take a few months but effectively i need to wait until around April 2022 to see the benefits of the Federal. I would use the options scheme

Hope I am correct so far ?

As someone that has only filed returns for 2 years here in NJ i struggle to understand the Federal side. I file jointly with my wife and each year we tend to get a check back for a few thousand. So I really need some more tax liabilities to help get this $7500 back ?
We have just rx'd some inheritance and will be taking some money out of an their IRA in Jan and that will probably have $10k in tax owing. So does this help ? Sorry for the dumb question, i could ask our HR Block advisor but that will take a while

"Hope I am correct so far?" Yes. Your understanding of the tax liability schedule and the rebate basics is correct.

It has been stated in the forum before, the tax credit is not related to your refund amount. Look at line 16 on your previous IRS Form 1040s. That is the tax liability amount that must be greater than $7500 if you want to take full advantage of the $7500 Federal EV tax credit. If you expect to owe an additional ~$10k on your 2021 tax bill due to your IRA withdrawal, you should be in good shape for getting the full credit. (I am assuming you, in fact, are withdrawing ~30K from your IRA vs. ~10K).

P.S. If a forum member just takes pride in being a dick, you can click on the forum members avatar and click "Ignore". (You do need to be signed into your forum account) If enough people do it, they will just be talking to themselves.

 

[Barno]

"Hope I am correct so far?" Yes. Your understanding of the tax liability schedule and the rebate basics is correct.

It has been stated in the forum before, the tax credit is not related to your refund amount. Look at line 16 on your previous IRS Form 1040s. That is the tax liability amount that must be greater than $7500 if you want to take full advantage of the $7500 Federal EV tax credit. If you expect to owe an additional ~$10k on your 2021 tax bill due to your IRA withdrawal, you should be in good shape for getting the full credit. (I am assuming you, in fact, are withdrawing ~30K from your IRA vs. ~10K).

P.S. If a forum member just takes pride in being a dick, you can click on the forum members avatar and click "Ignore". (You do need to be signed into your forum account) If enough people do it, they will just be talking to themselves.

"Hope I am correct so far?" Yes. Your understanding of the tax liability schedule and the rebate basics is correct.

It has been stated in the forum before, the tax credit is not related to your refund amount. Look at line 16 on your previous IRS Form 1040s. That is the tax liability amount that must be greater than $7500 if you want to take full advantage of the $7500 Federal EV tax credit. If you expect to owe an additional ~$10k on your 2021 tax bill due to your IRA withdrawal, you should be in good shape for getting the full credit. (I am assuming you, in fact, are withdrawing ~30K from your IRA vs. ~10K).

P.S. If a forum member just takes pride in being a dick, you can click on the forum members avatar and click "Ignore". (You do need to be signed into your forum account) If enough people do it, they will just be talking to themselves.

That is not nice. I am sorry if I appeared harsh, so I apologize. I realize now that someone can own a Jaguar Ipace and a BMW MI35MX, and are about to buy a Mach E and use HR Block. My bad.

 

[Chinsexpat]

Thanks everyone. i work directly with someone at HR block Advisors and I think they are CPA, but maybe good to check. It’s a physical office not over the net and they have a lot of expats from different countries. Mine isn’t the easiest of returns as we have assets in England and the USA. At least each year we have had a refund.

Covid meant I ended up spending more time in the UK than planned and the company gave me an IPace (going back shortly) The wife has been driving the M135ix. We did have an F150 and Edge ST here. So looking at a Ford isnt unusual. Finding a good dealer slightly harder.

I do need a car by mid Jan latest, so it may end up ruling this car out.

 

[First Edition]

For comparison purposes, the residual on a 2021 F-150 Super Crew 4x4 is 61% for 36 or 39 months and 12k per year per ALG.

 

[DBC]

Covid meant I ended up spending more time in the UK than planned and the company gave me an IPace (going back shortly)

So how did you like the I-Pace?

 

[DBC]

According to Ford‘s residuals, the Mach E will retain far less value over time than the comparable Tesla Model Y.

This is so funny. There is no such thing as a residual on a Model Y. If you think otherwise please tell me what the residual is. (And don't try and calculate since you don't know if the lease payment is a discount off MSRP or lease cash or the residual -- no way to tell).

Plus at best residuals are estimates and more usually flights of fancy. I've leased where everyone knew the residual had nothing to do with reality. So rather than an expression of confidence in resale value a high residual is usually act of desperation to move metal.

This is pretty basic stuff.

 

[DBC]

As someone that has only filed returns for 2 years here in NJ i struggle to understand the Federal side. I file jointly with my wife and each year we tend to get a check back for a few thousand. So I really need some more tax liabilities to help get this $7500 back ?

Short answer is "it depends". The amount of your refund isn't connected with your tax liability. For example, if you made payments of $102,500.00 and your tax bill was $100,000 then you would get a $2500 refund. If you made payments of $7500 and the tax bill was $5000 you would get a $2500 refund. In both cases the refunds are the same -- $2500 -- but the tax bill in the first case is $100,000 and in the second $5000. For purposes of this credit you only care about the tax bill aka tax liability.

A quick look at Form 1040 should tell you what the situation is. Just find the line that tells you what your "total tax" was.

But as a foreign national with differing sources of income your situation is going to be more complicated, so the advice to get some professional advice is a good one. FWIW I don't think that all tax preparers are CPAs, but you don't need to be a CPA to do tax returns. The CPA is just a credential. Just try and make sure you have someone who knows what they are doing. Most do BTW.

 

[DBC]

That said, given the inheritance and everything, I'm guessing you'll have no problem qualifying for the full $7,500.

You have the tax liability right but inheritances are not considered income unless the inheritance was income to the deceased. So what does that mean? LOL Basically income to the deceased would be things like employee compensation not paid before death, a bonus not paid before death, or a 401(k). So a house or stock would not be income but rent from the house or dividends from the stock would be.

 

[DBC]

That is not nice. I am sorry if I appeared harsh, so I apologize. I realize now that someone can own a Jaguar Ipace and a BMW MI35MX, and are about to buy a Mach E and use HR Block. My bad.

In fact you gave very good advice. I can understand your skepticism concerning someone with substantial income using HR Block, which AFAIK still encourages preparers to turn in clients who are suspected tax cheats in order to supplement their incomes. But they may not know that.

 

[Redundant]

In NJ the program will eventually be a "cash on the hood" program so that the $5000 state rebate would go directly as a downpayment to the dealer. For the near term it works as a $5000 rebate to the consumer regardless of whether you lease or finance (including options plan).

With the $2500 cash incentive on the options, the fact that NJ has no sales tax on BEVs, and the $12,500 in government deductions/rebates the 48 month options plan is far better than the regular lease. The balloon payment for my route 1 is $17,300 on a 48 month options contract with 15k miles, and I am getting $15k in cash from Ford, Uncle Sam, and NJ - basically enough money to buy the thing outright at the end AND a manageable monthly payment.

Wow, I know nothing about leases as I have never done one mostly because I put too many miles on my daily driver, over 20K a year. However, post covid, I am aiming to going into the office only 3 times a week rather than 5, now that we know it can be done and works. I would like to have the option of walking away after the lease. So many here are saying the residual value after the lease is so low that it is not worth it. But, as you laid it out above, it sounds more tempting.

 

[First Edition]

According to Ford‘s residuals, the Mach E will retain far less value over time than the comparable Tesla Model Y.

This is so funny. There is no such thing as a residual on a Model Y. If you think otherwise please tell me what the residual is. (And don't try and calculate since you don't know if the lease payment is a discount off MSRP or lease cash or the residual -- no way to tell).

Plus at best residuals are estimates and more usually flights of fancy. I've leased where everyone knew the residual had nothing to do with reality. So rather than an expression of confidence in resale value a high residual is usually act of desperation to move metal.

This is pretty basic stuff.

Please re-read my quote and inform me of where I stated the residual for the Y?

Do you believe the MME will retain a higher value over time than the Y? Ford Credit doesn't seem to think so.

 

[engnrng]

Yes, this is what folks have been suggesting. Let's say you get a new BEV in January 2021. Let's assume that your life stays nearly the same as in 2020, and that you'll continue to have at least $7,500 of tax liability for tax year 2021.

If this is the case, you can receive your tax credit a lot sooner by adjusting tax withholdings right after you get the new car, rather than waiting for over a year later for when you finally file 2021 taxes with the IRS during 2022.

Good job @macchiaz-o. Lot of confusion on this thread. The $7500 tax credit reduces your tax liability by $7500, but not below $0. Let me try an example. If your Federal tax liability for this year, 2020, for example works out to $9000 and you had withholding of $10,000 (most people withhold way too much and let the Feds use the money interest free for the year), you would get a refund of $1000 a few weeks after you file your 2020 return. Now, let's say you take delivery of an EV early in 2021 and your income and deductions stay pretty much the same for 2021 as they are for 2020. Then, when you do your return for 2021, your tax liability will work out to $1500 instead of $9000 because of the tax credit. If you still insist on wanting to get a $1000 refund early 2022, then work with your employer to have your withholding be a total of $2500 by the end of 2021. Your withholding reduction for 10 months (say you take delivery of your MME in Feb) would work out to $750 PER MONTH more in your take-home pay. REMEMBER to change your withholding back to normal in January 2022.

If anyone has any questions about how this works, feel free to PM me.

 

[engnrng]

Short answer is "it depends". The amount of your refund isn't connected with your tax liability. For example, if you made payments of $102,500.00 and your tax bill was $100,000 then you would get a $2500 refund. If you made payments of $7500 and the tax bill was $5000 you would get a $2500 refund. In both cases the refunds are the same -- $2500 -- but the tax bill in the first case is $100,000 and in the second $5000. For purposes of this credit you only care about the tax bill aka tax liability.

A quick look at Form 1040 should tell you what the situation is. Just find the line that tells you what your "total tax" was.

But as a foreign national with differing sources of income your situation is going to be more complicated, so the advice to get some professional advice is a good one. FWIW I don't think that all tax preparers are CPAs, but you don't need to be a CPA to do tax returns. The CPA is just a credential. Just try and make sure you have someone who knows what they are doing. Most do BTW.

"Enrolled Agents" are people qualified and paid to prepare and submit tax returns, if they are not CPA's.

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