DucRider wrote: BoltEV wrote:
I presume both of you paid withholding taxes and/or quarterly estimated tax payments in order to increase your refund with your EV tax credit.
I purchased my latest 19 Bolt EV one year ago and was told by my accountant that the $3,750 tax credit for me was wasted as I owe no federal income tax, it is not applicable to my Uber driving generated self employment tax and is not available to me for next years federal income tax.
Had I known that in advance, I would have put my daughter on title with me, so that she could use the tax credit!
Time to find a different accountant.
Self employment tax is
income tax (just no employer to do the withholding). There are Social Security and Medicare portions you pay in addition to the Income Tax. It doesn't matter if you "owe" at the time of filing, if there was any tax liability shown on your return, the credit can be applied..
Self employment tax is taxable income. It is listed on your tax form as a tax (on your 1040). It is added into your total tax liability. Now, unless the law on the EV tax credit specifically says "only if you are an employee" (which I doubt), it is a tax. It doesn't matter if you have to write a check when you file because you have already pre-paid enough. What you pay when you file is the "amount due", not the tax liability. Hey if you made 120K, and didn't have to write a check, you could still apply the tax credit, and the govt would be sending YOU a check. It doesn't matter where the money came from, stocks, bonds, stock options, ESPP, whatever ; if it adds to your taxable income enough to generate a tax liability then you can file for a tax credit. You can file a 1040X (amended return) at some later point to get the tax credit if you had ANY tax liability, within 3 years (well or until a law is passed eliminating the credit, or the law says "can only be taken the year the car was bought"). All this is moot if you simply didn't make enough money to have a tax liability.
Also (too late now) you could
have moved money from a traditional IRA to a Roth IRA "for free" . You move just enough money to make sure your tax liability would be $3500 (or whatever credit you would get).