Question:It’s been a few years since I wore my tax hat, but non refundable simply means that if your tax credits exceed your tax liability, the government will not refund you the excess; however, your tax credit will still decrease your tax liability dollar for dollar until your liability hits zero. Any amounts prepaid should therefore be refundable.
If your net federal tax liability by year end is $4k, you can claim the credit here and get $4k.My tax liability by year end is going to be around $4k.
CorrectSo I owe 25k in taxes but have already paid 24k so I won’t owe that last 1k bc of the credit and should get a refund of 6.5k right?
i had sent a similar Q to my CPA and he told me flat out, even if i had paid more taxes than i owed end of year, i will get that 7.5 credit. now if your total tax credit for the year is 5k, you just get that 5k backSo I owe 25k in taxes but have already paid 24k so I won’t owe that last 1k bc of the credit and should get a refund of 6.5k right? Because my accountant says no but as you all said fire him, I am calling another one now because I don’t think I sounds right that I loose the 6.5k!!
Correct.So I owe 25k in taxes but have already paid 24k so I won’t owe that last 1k bc of the credit and should get a refund of 6.5k right? Because my accountant says no but as you all said fire him, I am calling another one now because I don’t think I sounds right that I loose the 6.5k!!
Abstract yourself from what you paid or paying. You'll get the credit depending on your tax liability.So I owe 25k in taxes but have already paid 24k so I won’t owe that last 1k bc of the credit and should get a refund of 6.5k right? Because my accountant says no but as you all said fire him, I am calling another one now because I don’t think I sounds right that I loose the 6.5k!!
isnt it funny that they have no problem taking interest free loans?(government doesn't like to give interest free loans
Depends on when they sell their quotaspeaking of credit, does anyone know when the credit for 4Xe is being phased out? this page doesnt even list 4Xe https://www.irs.gov/businesses/irc-30d-plug-in-electric-drive-motor-vehicle-credit-quarterly-sales
per this page updated on Nov 3, no phase out is mentioned for 4Xe https://www.fueleconomy.gov/feg/taxevb.shtml
Your amazing thank you so much had a heart attack today when the guy told me that!!! Thank you thank you!!Correct.
All withholding is simply an estimate for 2021. How much was withheld has no bearing on your ultimate tax liability (penalties for under-withholding aside... which isn't relevant here).
Example:
Option A:
Paid 24k in taxes
Return shows 25k taxes due (before credit)
Return shows 17.5k taxes due (after credit)
You get a refund for 6.5k come returns season
Option B:
Paid 0k in taxes
Return shows 25k taxes due (before credit)
Return shows 17.5k taxes due (after credit)
You need to pay 17.5k come returns season
Technically with option B, if you substantially under-withheld, you may face a 6%-ish penalty on the return-due (government doesn't like to give interest free loans)... but as mentioned, not relevant here.
Who knows what else he's gotten wrongYour amazing thank you so much had a heart attack today when the guy told me that!!!
What he saidIf your net federal tax liability by year end is $4k, you can claim the credit here and get $4k.
And that's what I had researched, but the OP scared the shit outta me.If your net federal tax liability by year end is $4k, you can claim the credit here and get $4k.