Wrangler 4XE Pricing

[Xcoaste]

Wow, I had no idea! So the 53K 4xe Rubi goes down to 45.5 (7,500 fed discount), and then down to 44.5 (1,000 NY discount)? Any idea how the rebate payout works? Off at time of purchase, or rebate check in the form of tax return?

You have to wait until you file your taxes and it isn’t a rebate, it is a credit which in tax terminology is very different. Everyone’s situation will be different, but if I was going to buy one of these, I would adjust my taxes on my paycheck so that I would have to pay in at tax time. The $7500 would then deduct from what I owed. Just how I would do it though. Best to consult a professional to have your own circumstances evaluated.

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[Chris Hall]

Wow, I had no idea! So the 53K 4xe Rubi goes down to 45.5 (7,500 fed discount), and then down to 44.5 (1,000 NY discount)? Any idea how the rebate payout works? Off at time of purchase, or rebate check in the form of tax return?

For the federal, you file it on your taxes.

 

[sk00pie]

You have to wait until you file your taxes and it isn’t a rebate, it is a credit which in tax terminology is very different. Everyone’s situation will be different, but if I was going to buy one of these, I would adjust my taxes on my paycheck so that I would have to pay in at tax time. The $7500 would then deduct from what I owed. Just how I would do it though. Best to consult a professional to have your own circumstances evaluated.

Ok I see. So it means you can owe 7500 less in taxes. But if you’re already paid up, you’d get that back in your return?

 

[Chris Hall]

Ok I see. So it means you can owe 7500 less in taxes. But if you’re already paid up, you’d get that back in your return?

Right. But you have to owe hat least that much. If you only pay $5000 in federal taxes in a given year, you would only get $5000 back. If you pay $10,000 in federal, you'd get $7500 back.

 

[Xcoaste]

Ok I see. So it means you can owe 7500 less in taxes. But if you’re already paid up, you’d get that back in your return?

It was explained to me that I would want to owe $7500+ to the federal government at tax time. I would then use this credit of $7500 to wipe that out and pay any remaining balance. If there was any.

 

[Sboden]

Just waiting for the dealership to get their single allotted Rubicon in so I can see the color, options and price. If all is good enough, I'll start dealing.

 

[Sboden]

I believe if you get a 1K tax refund you would then get a 8.5K refund. You get the money no matter what depending on your tax obligation like Chris Hall stated.

 

[Xcoaste]

Here is some info from internet:
How Does Your Income Affect the EV Tax Credit?
You must have a federal tax liability in the year you purchase an electric car or plug-in hybrid to claim the tax credit. The tax liability must meet or exceed the amount of credit you're requesting. If, for example, you owe $6,000 in federal taxes, you can only claim a credit of $6,000 – even if the vehicle qualifies for a full $7,500 tax credit. It’s important not to confuse your federal tax liability with the size of the check you have to write by April 15, as your income tax liability also reflects any amounts withheld from your paycheck throughout the year.

Confused? That’s why it’s important to talk to a tax pro that understands your financial situation. Read the U.S. News Money team’s guide to finding a tax professionalto get the right one for your needs.

Some experts suggest EV buyers with no tax liability transfer money from a traditional IRA to a Roth IRA, creating a tax liability that's about equal to your EV tax credit. Then, use the credit to cover the tax liability. Withdrawals from traditional IRAs are taxed when you withdraw the funds. You fund Roth IRAs with post-tax dollars, and their earnings grow tax-free. The U.S. News Money team has an excellent guide to traditional versus Roth IRAs.

 

[Sboden]

So you are saying I'm wrong and you have to owe taxes at the end of the year to get the credit up to $7500?

 

[dalema]

So you are saying I'm wrong and you have to owe taxes at the end of the year to get the credit up to $7500?

xcoaste explained it well. There are two different things being talked about (and confused here):

(1) what your federal total tax liability is based on your earnings during the year. Your net earnings multiplied by a tax rate.

(2) the difference between what you have had withheld from your paycheck each month and what your federal tax liability in (1) is.

For example, at the end of the year you fill out your tax return and you will calculate what your federal tax liability (1) is - let’s say $16,000.

This is going to be the same number regardless of how much you’ve withheld from your paycheck each month.

Let‘s say you withheld $0 from your paycheck each month - in April the check you write to the government is $16,000.

Let’s say you withheld $1,000 from your paycheck each month (for the year that is 12x$1,000 = $12,000 withheld). Then in April you will write a check for $4,000 = $16,000 liability - $12,000 withheld.

And just to top it off now let’s say you bought the hybrid and got the $7,500 tax credit. Your tax liability (1) would now be $16,000-$7,500 = $8,500. As you withheld more than that ($12,000) you would get a refund of the excess you had withheld or $3,500 = $8,500-$12,000

Just so long as your federal tax liability (1) is $7,500 when you calculate that, then you can use the full tax credit of $7,500.

maybe that helps, maybe it confuses it more.

[again just an example, not tax advice - that’s what CPAs who specialize in that are for!]

 

[sk00pie]

xcoaste explained it well. There are two different things being talked about (and confused here):

(1) what your federal tax liability is based on your earnings during the year. Your net earnings multiplied by a tax rate.

(2) the difference between what you have had withheld from your paycheck each month and what your federal tax liability in (1) is.

For example, at the end of the year you fill out your tax return and you will calculate what your federal tax liability (1) is - let’s say $16,000.

This is going to be the same number regardless of how much you’ve withheld from your paycheck each month.

Let‘s say you withheld $0 from your paycheck each month - in April the check you write to the government is $16,000.

Let’s say you withheld $1,000 from your paycheck each month (for the year that is 12x$1,000 = $12,000 withheld). Then in April you will write a check for $4,000 = $16,000 liability - $12,000 withheld.

And just to top it off now let’s say you bought the hybrid and got the $7,500 tax credit. Your tax liability (1) would now be $16,000-$7,500 = $8,500. As you withheld more than that ($12,000) you would get a refund of the excess you had withheld or $3,500 = $8,500-$12,000

Just so long as your federal tax liability (1) is $7,500 when you calculate that, then you can use the full tax credit of $7,500.

maybe that helps, maybe it confuses it more.

That both helped and hurt . So basically the 7,500 only works if you own taxes end of year. I never owe, always pay more during year, get big refund. So currently I'd get 0 4xe refund. I'd have to pay less tax during year and owe money to apply this.

 

[Chris Hall]

So you are saying I'm wrong and you have to owe taxes at the end of the year to get the credit up to $7500?

Not so much “owe” but your total liability. If you pay $6,000 in the year yet owe $4,000 when you file your taxes, your combined liability is $10,000.

 

[dalema]

That both helped and hurt . So basically the 7,500 only works if you own taxes end of year. I never owe, always pay more during year, get big refund. So currently I'd get 0 4xe refund. I'd have to pay less tax during year and owe money to apply this.

Nope - that’s not the answer ?

Pull up your 2019 tax return and look at the $ number on line 16 - that is your total tax liability or (1) in what I wrote.

if this is $7500 or higher, you can claim the full tax credit.

it has nothing to do with what you have paid during the year / had withheld during the year from your wages.

 

[blueap2]

That both helped and hurt . So basically the 7,500 only works if you own taxes end of year. I never owe, always pay more during year, get big refund. So currently I'd get 0 4xe refund. I'd have to pay less tax during year and owe money to apply this.

It's not whether you get a refund at the end of the year or not, it's about your tax liability. Those are two different animals. Lets say you have to pay $10,000 worth of tax, but you pay $12,500. Instead of getting a refund of $2,500, you would get a $10,000 refund. ($2,500 + $7,500)

 

[sk00pie]

Nope - that’s not the answer ?

Pull up your 2019 tax return and look at the $ number on line 24 - that is your total tax liability or (1) in what I wrote.

if this is $7500 or higher, you can claim the full tax credit.

it has nothing to do with what you have paid during the year / had withheld during the year from your wages.

Ah ok got it. Watched a youtube video which basically said the same. Depends on total tax liability. Video mentioned a few others lines to look at, and 24 looks different on mine. All lines that show "total tax liability" are far greater than 7500 on my return though, so looks like I'd get the full amount.

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