: How to claim federal tax credit



sgtpokey
06-06-2012, 03:03 PM
Hello,
I could not find an obvious post searching so I'll just post this question:
Can I verify that for the federal tax credit all I do is fill out form 8936, but DO NOT send that to the IRS until I send my normal 2012 tax return next April? Or do I have to send the IRS some kind of notification now, to ensure I get a credit?

*Just bought my 2012 volt on June 2nd. The is my first "normal" commute day and I am pleased that my 84 roundtrip commute seems to be well in range for me (got the full 42 miles all electric with 5 miles to spare on the way to work and AT work I can plugin to recharge). Love the car!!

dwl
06-06-2012, 03:07 PM
You don't have to do anything beforehand. Just fill out the form, send it in with your tax returns when the time comes, and get monies.

drbruns
06-06-2012, 03:10 PM
This assumes that you have at least a $7500 tax liability for 2012.

sgtpokey
06-06-2012, 03:11 PM
Thanks, and yes the liability side is not an issue

Paul*
06-06-2012, 03:21 PM
you can update your W-4 withholding now to take less income tax out of your paycheck.

http://www.irs.gov/individuals/page/0,,id=14806,00.html

BAZINGA
06-06-2012, 03:24 PM
I'm told you can also adjust your federal withholdings NOW and start getting some of that $7500 now (pay check by pay check).

Nopreference
06-06-2012, 03:32 PM
I just worry with all the political bull going on that they will repeal the federal tax credit before I file my taxes in 2013.

dwl
06-06-2012, 03:47 PM
I just worry with all the political bull going on that they will repeal the federal tax credit before I file my taxes in 2013.

That's pretty darn unlikely. Obama wants to expand it. So I think he'll be unhappy if any efforts to repeal it gain traction. I think we're pretty safe for 2012. Getting dropped when it comes up for renewal is a completely different issue. Still probably safe there. But not renewing it as a TON easier than repealing it.

DonC
06-06-2012, 04:37 PM
Congrats on the car. It's crazy good you can charge at work. Unless it gets very cold or nasty you should have gas free commuting even with an 84 mile round trip. Sweet. As mentioned by others, you just file all the forms whenever you file in 2013.

DonC
06-06-2012, 04:38 PM
I just worry with all the political bull going on that they will repeal the federal tax credit before I file my taxes in 2013.You can relax. The credit is for 2012 and they can't retroactively repeal the 2012 law in 2013.

Jim Fallston Md.
06-06-2012, 05:18 PM
Also you may be wasting your time filling the form out now as it has to be a 2012 tax year form and for 2011 tax year it was not available until mid January.

Ron C
06-06-2012, 05:25 PM
The form was available in TurboTax 2011 once it was approved by the IRS. I anticipate that it will be the case for TT 2012 as well. Can't speak for TaxCut or other tax preparation software.

Worked fine when I used it. The best part about this credit (or is it a rebate?) is that it's not limited by AMT.

Cord
06-06-2012, 06:02 PM
See about getting a second Volt and have double the credit.

DonC
06-06-2012, 06:12 PM
The best part about this credit (or is it a rebate?) is that it's not limited by AMT.Definitely a credit. Credits are like deductions -- they lower your tax. With rebates you can actually get back more than you owe in taxes.

drbruns
06-06-2012, 07:56 PM
It was in TaxCut for tax year 2011.

FrankIII
06-06-2012, 10:15 PM
you can update your W-4 withholding now to take less income tax out of your paycheck.

http://www.irs.gov/individuals/page/0,,id=14806,00.html

So.. if you don't update your W4 to produce a $ 7500 tax liability there will be no credit? If you were not to update your W4 AND you still had a $ 7500 or larger tax liability, would you just get that much more $$ back? I'm confused.

drbruns
06-06-2012, 10:49 PM
Modifying your W-4 withholding does not affect your tax liability. It just adjusts the federal withholding taxes deducted from your paycheck. This will affect whether you will ultimately owe when you file your tax return next year. You could theoritically claim 20 dependents and have no tax withheld each pay period where you will likely owe money next April 15. On the other hand, you could claim 0 dependents and have a bunch of taxes taken out and get a large refund next April 15. In both cases, you are making the same taxable amount and will ultimately owe the same amount of tax. The W4 lets you decide how you want to manage your tax payments throughout the year.

ronk
06-07-2012, 09:47 AM
A little about me. I'm retired, get a small pension and social security. I have a 401k. For me to get the full $7500 tax credit, I was thinking about taking about $40,000 out of the 401k, and that would make me pay 20% or $8000 tax. IS MY THINKING CORRECT?

sgtpokey
06-12-2012, 11:41 AM
A little about me. I'm retired, get a small pension and social security. I have a 401k. For me to get the full $7500 tax credit, I was thinking about taking about $40,000 out of the 401k, and that would make me pay 20% or $8000 tax. IS MY THINKING CORRECT?

In so far as you MUST have a tax liability > $7500, yes. I'm not a tax accountant so cannot advise on whether your idea is the best or even a good idea, but from what you said, if you have NOTHING else that is taxed then yes you have to create tax liability. However you can, you have to have a tax liability to match against the tax credit.

Cord
06-12-2012, 04:14 PM
Ask you tax person about IRA Roth conversion or other events that trigger a tax. Move items that reduce tax to the next year.

dancergene
06-26-2012, 10:22 PM
This assumes that you have at least a $7500 tax liability for 2012.

so i will be taking money out of our IRA fund to buy the volt. how much will i need to withdraw to get a 7500.00 tax liability? my guesstimate is about 45000.00 does that sound about right?

RScott
06-27-2012, 06:35 AM
so i will be taking money out of our IRA fund to buy the volt. how much will i need to withdraw to get a 7500.00 tax liability? my guesstimate is about 45000.00 does that sound about right?

I would definitely ask an accountant or tax expert about this. The amount that you would pay to get their answer could very easily save you the cost of their service. You don't want to get someone here to give you an "I heard it on the Internet" answer (someone sounding like an expert, who is totally wrong), that could prevent you from getting a chunk of that $7,500 -- or causing you to have to pay too much in taxes.

There could be factors about your taxes that we do not know about or think to ask about (rental property deductions, Schedule K, ...), and it also of course depends on your tax bracket.