My Mach-E ordeal finally solved!

[EELinneman]

At least the ADM wasn’t excessive. I’d imagine with the shortage of both new and used cars, dealerships still need to keep the lights on and employees paid.

Surprisingly few have gone bust this past year

https://www.statista.com/statistics/379530/number-of-light-vehicle-dealerships-in-the-united-states/

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[generaltso]

You can only get 1 credit per year for EVs though, so if you already took it for the VW, it wouldn't matter regardless.

That's not true. You just have to have enough tax liability to cover multiple EV tax credits.

 

[EELinneman]

The tax form has 2 vehicles in it
https://www.irs.gov/pub/irs-pdf/f8936.pdf

 

[Murse-In-Airy]

The tax form has 2 vehicles in it
https://www.irs.gov/pub/irs-pdf/f8936.pdf

AND clearly says to use multiple forms if you need more room. ?

 

[david33309]

That is not correct. The $7500 is a tax credit, so if you had taxes of $7501, you would get the $7500 tax credit making your net effective tax $1. The same applies to the solar credits if you put in PV and/or batteries in your primary residence. It gets more complex if it is for a business. But, for the majority of us, we will be getting a $7500 tax credit. With that said, if your tax was only $6000, then you will only get a $6000 tax credit. If you had $1,000,000 tax then you will get the $7500 unless the new bill passes and is signed into law at which point there are income caps that will zero out the personal tax credit but not the 200,000 car limit imposed on the manufacturers.

I get a refund every year. As I understand it, if you owe no taxes, you don’t get more money back because you are the taking $7,500 off of your income, correct? It only lowers the amount of tax you would have to pay:

 

[EELinneman]

I get a refund every year. As I understand it, if you owe no taxes, you don’t get more money back because you are the taking $7,500 off of your income, correct? It only lowers the amount of tax you would have to pay:

It's a tax credit, not related to income. So, you would have to have $7500 in tax liability to claim the full credit. If your taxes are over $7500, you should get the full credit regardless of refund, owe, etc.

Not a CPA, so perhaps one can comment here and provide some expertise.

 

[timbop]

I get a refund every year. As I understand it, if you owe no taxes, you don’t get more money back because you are the taking $7,500 off of your income, correct? It only lowers the amount of tax you would have to pay:

Not exactly. Presumably you have withholdings taken from your paycheck; that amount isn't exactly what is meant by "tax liability".

On your tax return there is an amount just under where your taxable income goes and I believe it is line 11a simply called "tax". If that amount is greater or equal to $7500 then you will get the full benefit. If for example that line has $10,000 on it and you employer withheld $11,000 from your paycheck, then you would get an $8500 refund: the $1000 you overpaid from your paycheck AND an additional $7500 for buying the car.

 

[Ford Motor Company]

This was a tough decision. I originally bought a VW ID.4 Memorial Day this year, and It was just bought back by VW under the Lemon Law for all the issues. I saw a Mach-E online at a dealership 25 miles from me so I made an appointment. At 2pm that day they confirmed the appointment and at 6:00pm when I arrived, the car had been sold. They were asking for a $5,000 ADM.

The next day I searched again online and found a Mach-E premium with 2,000 miles on it at a dealership 40 miles away. After asking a few questions, I asked if I could put a deposit down to hold it and went to see the car the next day. Needless to say, it's now mine.

A few interesting choices... It's a a Mach-E Premium, but it's Infinite Blue Metallic - a color that was quickly retired. the first year due to supply issues. I figured I'd be OK with the tax credit because I already bought an EV this year, and I still have my free charging with Electrify America. I did buy the extended warranty which is bumper-to-bumper for 8yr/80K from date of purchase, not date of original sale..

One thing that many people don’t understand about the tax credit. For 2021, this is NOT any type of discount off of the sales price. This is NOT going to get you an additional $7,500 tax refund. It simply gives you up to $7,500 less tax reliability.

I did pay a $4,000 ADM and here's why. I wanted a Mach-E, and I no longer have a car. I didn't want to wait 6-7 months to order one, and who knows what's going to happen with supplies and availability. I absolutely LOVE this car. This is the 7th Ford product I've owned, and never really had issues with any of them. I have mixed feelings about the ADM, but truth be told, after getting behind the wheel, the $4K gets pushed gently to the back of my head and I tell myself it's only $66 a month more.

p.s. I charged it to 100% just once to see what the extended range would be. Not bad!

Congratulations! So happy to see you have received your new Mach-E, it looks great. Enjoy the new ride!

 

[benk016]

I get a refund every year. As I understand it, if you owe no taxes, you don’t get more money back because you are the taking $7,500 off of your income, correct? It only lowers the amount of tax you would have to pay:

Typically the refund you get, is just from what you overpaid. Not because you didn't owe any taxes. Say you had $10,000 withheld from your paychecks for federal taxes. Come tax time, you file your taxes and you ownly owe $9,000. You will get a refund of $1,000.

Now, if you have the EV Tax credit, in that same situation, you would have paid in $10,000 from your checks, but now you would get back $8,500 in a refund, because that tax credit reduced your $9,000 tax bill down to $1,500.

 

[TGIF]

I get a refund every year. As I understand it, if you owe no taxes, you don’t get more money back because you are the taking $7,500 off of your income, correct? It only lowers the amount of tax you would have to pay:

The tax liability is the crucial thing, not whether you have additional amounts due. If you have $7500 or more of tax liability you will get the full value of the credit. If you overpaid your taxes, you will get a refund check that reflects $7500 less of taxes. My accountant forgot to claim the credit for my PHEV a couple years ago. We had already paid the tax so we immediately filed an amended return and got a check back for $7500.

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