[VoltoBolt]

Why was your credit not applicable to self-employment taxes?

It's your turn to do the research and come up with an answer to share with us.

 

[LoneR]

@VoltoBolt I'm sorry. I thought you were made aware of such. Do you not know?

 

[VoltoBolt]

No reason to be sorry. My tax preparer just informed me that it was not applicable to my self-employment taxes and quite honestly, I was not willing to pay his hourly rate to find out more details.

At least with this knowledge, others here can plan accordingly if they happened to be in my circumstance.

 

[a priori]

No reason to be sorry. My tax preparer just informed me that it was not applicable to my self-employment taxes and quite honestly, I was not willing to pay his hourly rate to find out more details.

At least with this knowledge, others here can plan accordingly if they happened to be in my circumstance.

This seems quite odd to me. As I read things, the only qualifiers were income (below certain numbers, depending on filing status) and tax liability for the year of the purchase.

 

[VoltoBolt]

Self-employment taxes (Social Security; Medicare) are not income taxes.

That is why the “gig” economy is built on “self-employed” independent contractors.

The Employers want to avoid these taxes.

My federal income tax liability was separate and that year was zero.

 

[BoltEUV]

Whew!
Good thing I didn't buy a $150K Escalade, Hummer EV or Corvette Z06

😁

 

[LoneR]

@VoltoBolt The IRS guidelines do not distinguish which type of tax. It simply states MAGI as the qualifying variable. As I have not prepared or researched self-employment tax liability instructions for 1040, I can't provide experienced advice. However, if it was mine, I would definitely look into deeper.

 

[VoltoBolt]

@VoltoBolt The IRS guidelines do not distinguish which type of tax. It simply states MAGI as the qualifying variable. As I have not prepared or researched self-employment tax liability instructions for 1040, I can't provide experienced advice. However, if it was mine, I would definitely look into deeper.

Are you quoting me the Federal Tax Credit rules applicable to 2019, when I purchased my Bolt EV?

What is MAGI?

I know The Gift of the MAGI by O'Henry!

 

[MarkCapeCod]

What is MAGI?

Modified Adjusted Gross Income

 

[VoltoBolt]

@VoltoBolt The IRS guidelines do not distinguish which type of tax. It simply states MAGI as the qualifying variable. As I have not prepared or researched self-employment tax liability instructions for 1040, I can't provide experienced advice. However, if it was mine, I would definitely look into deeper.

I hate to 2nd guess my accountant/tax preparer, especially at his hourly rates

But given yours and @a priori 's proddings, and after looking at my 2019 1040 and IRS Forms 8936 and Schedule 3, I just emailed him and asked him to recheck my 2019 return.

I'll post when I hear back...🤞

 

[VoltoBolt]

Here is his response:

The EV tax credit is a non-refundable tax credit. Assuming you had tax to offset, the EV credit would be carried to Line 13b of your Form 1040 from Schedule 3, line 6.

Line 18d on the 1040 is only for refundable credits.

Because your Form 1040 line 12 (tax) is zero, your EV credit allowed is zero.

Self-employment tax cannot be reduced by non-refundable tax credits.

 

[LoneR]

Here is his response:

The EV tax credit is a non-refundable tax credit. Assuming you had tax to offset, the EV credit would be carried to Line 13b of your Form 1040 from Schedule 3, line 6.

Line 18d on the 1040 is only for refundable credits.

Because your Form 1040 line 12 (tax) is zero, your EV credit allowed is zero.

Self-employment tax cannot be reduced by non-refundable tax credits.

The credit only lowers your tax liability. To be clear, you had no tax liability.

It is true that you can't use a non-refundable tax credit to increase your refund or to create a tax refund when you wouldn’t have already had one.