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Discussion Starter #1
So I just took delivery of a 2017 volt last week -- tax credit would be applied to this years return 2016. I know normally I'd turn all this in after Jan 2017

Was wondering if its possible to turn in and get everything to the IRS now? just to get it out of the way?

Or do I really need to wait till the start of 2017 to turn in everything for 2016 taxes and get my tax credit/return?

Thanks!
 

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No, do your taxes in the spring.

Reduce federal withholdings by 1000/month now. Talk to your workplace's HR department to do that. The idea is withhold less than normal to get that in your hands through the end of the year. If you are needing money. And if so, is your income level really enough to be affording a Volt if you want to get the money now rather than next spring? These are questions to have lined up before the purchase.
 

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No, you can't file your taxes until after the end of the year. You don't yet know for certain what your tax liability is. Adjust your withholding to account for your estimated tax liability. However, I recommend being conservative so you don't under pay too much and owe a penalty. I personally pursue a zero balance strategy. I evaluate my tax position 2-3 times per year and adjust my withholding accordingly.
 

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Discussion Starter #4
already reduced federal with holdings to zero about 2 months ago :)

Since I didn't know for sure I was buying at that point, what's nice, is for the taxes I've already paid in for the first 5 months of the year, I'm expecting back come refund time. Woohoo and dont' worry it's going into a lump sum account for the auto loan so I can pay it off that much quicker :)

Thanks for the input guys.
 

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already reduced federal with holdings to zero about 2 months ago :)

Since I didn't know for sure I was buying at that point, what's nice, is for the taxes I've already paid in for the first 5 months of the year, I'm expecting back come refund time. Woohoo and dont' worry it's going into a lump sum account for the auto loan so I can pay it off that much quicker :)

Thanks for the input guys.
You don't have to build up an amount before paying chunks of the loan off. Mathematically, it's better to pay as you collect the withholdings as the next month's interest would be computed on a smaller balance. BUT< the difference probably isn't a happy meal. The real wise way to handle this is to scrimp like crazy for a few months and pile everything you possibly can into paying off the car as quickly as possible. I paid off my volt's 5 year loan in 18 months. It's nice not having a car payment whatsoever. I hope to have enough cash saved up to buy the next EV outright.
 

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So I just took delivery of a 2017 volt last week -- tax credit would be applied to this years return 2016. I know normally I'd turn all this in after Jan 2017

Was wondering if its possible to turn in and get everything to the IRS now? just to get it out of the way?

Or do I really need to wait till the start of 2017 to turn in everything for 2016 taxes and get my tax credit/return?

Thanks!
The form for the tax credit will not be available for 2016 taxes until Jan-Feb 2017.
 

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Discussion Starter #7
You don't have to build up an amount before paying chunks of the loan off. Mathematically, it's better to pay as you collect the withholdings as the next month's interest would be computed on a smaller balance. BUT< the difference probably isn't a happy meal. The real wise way to handle this is to scrimp like crazy for a few months and pile everything you possibly can into paying off the car as quickly as possible. I paid off my volt's 5 year loan in 18 months. It's nice not having a car payment whatsoever. I hope to have enough cash saved up to buy the next EV outright.
Yeah I tend to pay off my cars 2 to 3X as fast as the loan calls for... all I seem to do is work, so it's pretty easy to throw an extra 500 each month at it to get the principal down.
 

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Or you could just lie and refile 2015 taxes. Oh wait, it's a 2017 car. Never mind.
 

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No,no,no! This is a common misconception! It is not how much of a tax refund that you get or how much additional tax you have to pay! It is your total tax liability that counts! Changing your withholding will not affect this one iota!

Reduce federal withholdings by 1000/month now.
 

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No,no,no! This is a common misconception! It is not how much of a tax refund that you get or how much additional tax you have to pay! It is your total tax liability that counts! Changing your withholding will not affect this one iota!
But it does allow for you to collect your money now rather than wait for Uncle Sam to cut you a check for your tax credit. Why give Uncle Sam a 0% interest loan? The important thing is to make sure you are 100% certain you qualify for the full tax credit, and to make sure you turn your withholdings back on when you have pocketed enough, otherwise come tax time, you might be scrambling around for cash to pay the tax bill.
 

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Or you could just lie and refile 2015 taxes. Oh wait, it's a 2017 car. Never mind.
Um, tax fraud could land you in prison. So don't lie to the KGB, I mean, IRS.
 

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Yeah I tend to pay off my cars 2 to 3X as fast as the loan calls for... all I seem to do is work, so it's pretty easy to throw an extra 500 each month at it to get the principal down.
So when the volt is paid off, why not keep paying yourself $800 per month into an account for the next car. In a very few years you will have enough to buy a new car. Wait a bit longer and you can buy a really nice car.
 

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Perhaps, but that is entirely different than the old saw than you MUST reduce your deductions to get the entire credit. The salient point is that your withholding has no affect whatsoever on your tax liability and the amount of EV tax credit you will get.

But it does allow for you to collect your money now rather than wait for Uncle Sam to cut you a check for your tax credit.
 

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already reduced federal with holdings to zero about 2 months ago :)

Since I didn't know for sure I was buying at that point, what's nice, is for the taxes I've already paid in for the first 5 months of the year, I'm expecting back come refund time. Woohoo
The process for getting the tax credit for buying an electric car is simple: as you do your taxes, enter the appropriate amount into the Tax Credits section of the 1040 Form, an amount determined by filling out the federal Form 8936 issued for that same year. Until the forms for the tax year are available, there is nothing you can submit to the IRS just to "get it out of the way." There is no document provided by the car dealer or manufacturer to be submitted with the filing.

The above posting suggests you don’t expect to be paying any federal income tax for 2016, that you have estimated that the tax credit for the new electric car purchase will be enough to cover what you owe, and you’ll then get a refund of all the withholding taxes you’ve already paid this year.

Have you confirmed this outcome? You could estimate your 2016 federal taxable income after deductions, and then look at the 2015 Tax Tables found in the Form 1040 instructions for that year to see how much income tax you would have paid last year with that taxable income. The tax tables for 2015 indicate a single taxpayer whose taxable income after deductions was $46,800 would have owed $7,500 in taxes, the amount the tax credit could have covered, leaving nothing more to pay and a refund of previously withheld funds. A lower taxable income would require a lower taxes due amount, thus reducing the value of the tax credit to the amount needed to cover the bill. A higher taxable income means a higher tax obligation, and the credit will not be enough to cover the obligation.
 
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