2024 Tax Credit success?

[Goog]

Excellent information. Thank you!

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[Gigahorse]

In which case you need to watch out for recapture if business use drops below 50% during the recovery period.

Yup if you are buying a business vehicle and then don't use it for your business you will have to pay recapture.
50% for business is not a lot
If you are just trying to get a discount on a vehicle not really for your business you are likely going to end up in hot water.

 

[Gigahorse]

Can you provide the link to this? I am all 1099 and I would like to send this to my tax accountant.

https://www.irs.gov/instructions/i4562#en_US_2024_publink1000309368

Column (i)—Elected section 179 cost.



Column (i)—Elected section 179 cost.

Enter the amount you elect to expense for section 179 property used more than 50% in a qualified business use (subject to the limits for passenger automobiles). Refer to the instructions for Part I to determine if the property qualifies under section 179.

You cannot elect to expense more than $30,500 of the cost of any SUVs and certain other vehicles placed in service during the tax year. This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight. However, the $30,500 limit does not apply to any vehicle:

• Designed to seat more than nine persons behind the driver's seat;
• Equipped with a cargo area (either open or enclosed by a cap) of at least 6 feet in interior length that is not readily accessible directly from the passenger compartment; or
• That has an integral enclosure fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.

Recapture of section 179 expense deduction.

If you used listed property more than 50% in a qualified business use in the year you placed the property in service and used it 50% or less in a later year, you may have to recapture in the later year part of the section 179 expense deduction. Use Form 4797 to figure the recapture

 

[mongo]

That is why most recommend taking the full 179 value the first year.
So if you 179ed the full $80,000 in 2025 and purchased it today, you would just have to make sure to drive the vehicle for business purposes until the end of 2025.

Buying in December makes it easy up qualify to take the deduction initially. However, the recovery period is multi-year, and if you ever sell the vehicle, that profit counts as income.
https://bradfordtaxinstitute.com/Content/Do-Not-Let-Section-179-Recapture-Hurt-You.aspx

 

[Jimo]

I’m own a 2024 Cybertruck AWD. The $80k plus $20k foundation one.

Anyone tried submitting their truck for the tax credit yet? It’s now eligible but I’m getting mixed signals. I’m going to e-file.

I wouldn’t be surprised if the IRS accepted it and then 5 years later from now and if a Democrat gets in they try to claw it back.

My CPA just finished my taxes and, since I bought a Model X AND a Cybertruck last year, I was able to claim $15,000 tax credit!

 

[mongo]

My CPA just finished my taxes and, since I bought a Model X AND a Cybertruck last year, I was able to claim $15,000 tax credit!

Business use?

 

[Jimo]

Business use?

No. I'm retired.

 

[mongo]

No. I'm retired.

Then the Cybertruck doesn't qualify for the 30D credit, your CPA is wrong.

 

[CyberGus]

Deduct anything you want, with all the IRS firings there won't be any more audits

 

[cybercricket]

Deduct anything you want, with all the IRS firings there won't be any more audits

They have 3 years to revisit one's records...

 

[CyberGus]

They have 3 years to revisit one's records...

IRS is getting layoffs, after the Biden administration had previously planned for an additional 80,000 employees to fill vacancies and address the working backlog. This not only jeopardizes the timeliness of processing returns, but leaves little bandwidth for auditing.

 

[Gigahorse]

IRS is getting layoffs, after the Biden administration had previously planned for an additional 80,000 employees to fill vacancies and address the working backlog. This not only jeopardizes the timeliness of processing returns, but leaves little bandwidth for auditing.

I wonder if the plan is to fill some of those roles through software and AI. I would think that with the correct programming and AI it would be able to go through returns much faster and flag anomalies more accurately for human review.

Anomalies like a $7,500 personal tax credit (not commercial) for a 2024 Cybertruck, a human auditor might miss that but software/AI SHOULD catch that it is a 2024 and does not qualify like the 2025 does.

 

[Dep]

I’m own a 2024 Cybertruck AWD. The $80k plus $20k foundation one.

Anyone tried submitting their truck for the tax credit yet? It’s now eligible but I’m getting mixed signals. I’m going to e-file.

I wouldn’t be surprised if the IRS accepted it and then 5 years later from now and if a Democrat gets in they try to claw it back.

Democrat or not, it’s up to you to understand the law and the implications of your actions. Since it’s over $80k—it does not qualify.

 

[cybercricket]

Democrat or not, it’s up to you to understand the law and the implications of your actions. Since it’s over $80k—it does not qualify.

Tesla didn't itemize the accessories in the FS package ? Also the main issue isn't the price, but rather the fact the battery in 2024 model contains imported components, so it doesn't count as US made.

 

[SCTesla]

Tesla didn't itemize the accessories in the FS package ? Also the main issue isn't the price, but rather the fact the battery in 2024 model contains imported components, so it doesn't count as US made.

Both are issues. FS wouldn't qualify with any battery. It's too expensive.

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