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Discussion Starter #1
Hey guys, I'm a newbie here, planning on getting the TDI.... It seems like this car is on high demands...most dealers around me area (South Bay, Los Angeles) does not carry this car.... Well, they said that I have to order it..etc...

Anyway, for the income tax credit.... I'm not an accounting freak here...but in order to qualify for it... I must file tax as itemized deductions only...and not standard deductions.... Is that correct?

Also, I read somewhere that this tax credit is only for the first 60,000 vehicles....and that every vehicle afterwards gets a smaller ammount....
 

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Don't know about the mechanics of filing for the credit (wife is a CPA, so leave that to her). However, you can take a look at my post from a week or two ago about the 60,000 number. My understanding is that full credit is give through the calendar quarter FOLLOWING the calendar quarter in whcih the 60,000th qualifying VAG vehicle is sold. This means that if the 60K car sells in May 2010, you have until 9/30 to buy / register. if the 60K car sells in the 3rd quarter, you have until the end of the year. Credit only applies through 2010 anyway, so after that is moot. Anyone's guess when the 60K car will be sold, as the numbers are not posted (see my post / rant from earlier on this topic).
 

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The income tax credit for the diesel is an offset to the federal taxes you will owe. It's applied directly to the tax amount. It doesn't make any difference if you itemize or if you take the standard deduction.

That's just as regards this particular credit on fed taxes. There's also sales tax and California income tax to be dealt with in a car purchase. My accountant will have to help me with that.

(I live in your area and purchased my Audi TDI on Sat. Yippee!)
 

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Discussion Starter #5
Thanks for the reply... I'm still somewhat confused, which is probably from my lack of knowledge in finance...haha

Anyway, I have read the sticky thread about the TDI...it's like SUPER comprehensive.... Much more than you ever want to know about the car... I also read the tax-credit thread... Still somewhat confused...

So here's my question, because I'm only making about 5k this year, so I'm planning to buy the TDI early next year....Maybe in January or February... Am I still qualify for the tax credit, assuming that I'm filing my tax in 2011....

Perhaps I need some clarification on the purchase lol...
 

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The year that you buy the car is the tax year that the tax credit is used. Buy the car in 2010 and it's credited towards your 2010 taxes that you file in 2011.

As stated before, if you owe $2000 in federal income tax and get a $1300 credit you now owe $700 in fed income tax. If you owe $1000 in fed inc tax and get a $1300 credit you owe $0 but you also don't get a $300 refund. Refer to the tax credit FAQ for the reference at the IRS.

You qualify for the tax if you buy the car but the credit amount gets phased out the quarter after they pass 60,000 sales. I estimate that this will be sometime mid-2010.
 

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The article at cars.com is wrong. The article there says that if a credit takes you below 0 tax liability then you get the amount in a refund. This is correct for refundable credits except the alternative motor vehicle is a non refundable credit. That means that if the credit takes you below 0 you don't get the amount of the credit below.

Linked to through the tax FAQ for TDI is this:
http://www.irs.gov/publications/p17/ch37.html#en_US_publink100035228

If you go to the top of the page the alternative motor vehicle credit is listed under nonrefundable credits, not refundable credits.
 

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Nothing like an incorrect article to dash my hopes.

So, since I always come out even on taxes (and often get a refund), it doesn't matter if the Audi gets $1,300 or $13,000. I don't get squat.

Nice. :(
 

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Nothing like an incorrect article to dash my hopes.

So, since I always come out even on taxes (and often get a refund), it doesn't matter if the Audi gets $1,300 or $13,000. I don't get squat.

Nice. :(
I am pretty confident of my interpretation. Sorry! Consult your tax advisor on how to take maximum advantage of it.
 

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Discussion Starter #11
Oh gosh, thanks guys lol.

I'm planning to get the TDI sometime early next year...is there any paperwork I need to fill out...etc....

Just a general tax questions here... But if I don't owe any tax money, then the income credit wouldn't be valid....so does it make sense for me to claim like 5 exemptions, but at the end of the year, I ended up paying for more taxes...which I can take the income credit?
 

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Tax Credit

It is not important if in fact you underpaid , over paid or paid the exact amount of "withholding tax". What is important is that you have a tax liability of at least $1300 (the tax credit). If you have $5,000 in taxes owed based on your income,, deductions etc. and the IRS" withheld" $5000 then you still get the tax credit since your actual taxes owed ( $5,000) are greater than $1,300.
 

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Discussion Starter #13
It is not important if in fact you underpaid , over paid or paid the exact amount of "withholding tax". What is important is that you have a tax liability of at least $1300 (the tax credit). If you have $5,000 in taxes owed based on your income,, deductions etc. and the IRS" withheld" $5000 then you still get the tax credit since your actual taxes owed ( $5,000) are greater than $1,300.
oh okay...that cleared things up a whole lot! thanks...so if the tax i owed...i paid complete with the withholding...then i'll get the income credit refunded......on that note...what's the AMT restrictions mean?

so in reality.... the car is cheaper with the tax incentives :)
 

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AMT means that if you filed alternative minimum tax you couldn't take the credit. The stimulus bill changed this so that you can for 2009. No news for 2010. This was not the case for 2008.
 

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I filed my taxes last year with TurboTax and they made it pretty simple to get Alternative Fuel Credit. As to the refundable nature of the credit, I do believe that is true.

Audi_FTW's interpretation is correct I think, because when I filed, I had only a half year of work because I graduated college in June and then started full time. So between half a year of work, paying money for tuition and the alternative vehicle credit, I had a very healthy refund. Now, I didn't get the full $1700 for the '10 Golf DSG because of other deductions but it still was about $1300 back.

Just my 2 cents. my two cents
 

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Tax credit for multiple cars?

Dear TDI Forum,

Hello. I purchased two VW TDIs in 2010 (the Sportswagen and a Golf). The Alternative Motor Vehicle Credit form (8910) has space for three or more vehicles. I guess this means that you can claim credits for multiple vehicles? The dealer told me that I can only claim the credit for a single car.

Thank you,

John

p.s. The Golf was a replacement for the Sportswagen which was totaled in an accident. The Sportswagen held up well in the crash.
 

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Dear TDI Forum,

Hello. I purchased two VW TDIs in 2010 (the Sportswagen and a Golf). The Alternative Motor Vehicle Credit form (8910) has space for three or more vehicles. I guess this means that you can claim credits for multiple vehicles? The dealer told me that I can only claim the credit for a single car.

Thank you,

John

p.s. The Golf was a replacement for the Sportswagen which was totaled in an accident. The Sportswagen held up well in the crash.
Yes, but you might not be able to claim the credit on the Golf unless you purchased the vehicle. If it was a replacement (say via insurance) then you did not purchase/lease the vehicle and do not qualify for the tax credit on the Golf.

If you did purchase the Golf with money from a settlement (say from the insurance agency AND it was taxed) then you should be able to claim the credit on the 2nd purchase.

From my reading of all the notices from the IRS there is no reason you can not claim the credit on 2 cars if you PURCHASED the 2 qualifying vehicles. Remember PURCHASED means with money that went into your account and not purchased for you by insurance or 3rd party (a-la gifted).
 
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