Stacking tax credits before September

[Griswold]

I've wanted a Cybertruck from day 1 but just couldn't stomach the price point. Don't like the idea of dropping so much money at once. It's hard to say where prices will go after the EV credit expires, my guess is $74999 for AWD, but if I buy one by end of September and get a 36 month loan it seems that I can get it for $72500 and have the interest back as a tax credit.

https://www.usatoday.com/story/grap...g-beautiful-bill-car-tax-credits/84450714007/

I know this isn't a financial forum but are there any accountants or folks smarter than me to give a basic equation so I can figure out if I can get both credits? I know based on income I qualify for the $7500. For the loan interest one how do I calculate to make sure I would get that back over 3 years? With child tax credits, maxing out 401k and HSA, I'd hate to assume I get the interest back and then don't.

I'd like to keep that money making 4% or whatever it goes to over 3 years rather than paying it all at once.

Thanks!

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[carsonag01]

I've wanted a Cybertruck from day 1 but just couldn't stomach the price point.

If I were in your shoes, I would buy a pre-owned Cybertruck and enjoy the huge savings from the depreciation.

 

[tingmo13]

I know everything is Impermanent, Life is Fragile and tomorrow is Uncertain-if you are Certain that you want Cybertruck-get it now!

over thinking, over calculating will confuse you more!

 

[Beetlebug62]

I've wanted a Cybertruck from day 1 but just couldn't stomach the price point. Don't like the idea of dropping so much money at once. It's hard to say where prices will go after the EV credit expires, my guess is $74999 for AWD, but if I buy one by end of September and get a 36 month loan it seems that I can get it for $72500 and have the interest back as a tax credit.

https://www.usatoday.com/story/grap...g-beautiful-bill-car-tax-credits/84450714007/

I know this isn't a financial forum but are there any accountants or folks smarter than me to give a basic equation so I can figure out if I can get both credits? I know based on income I qualify for the $7500. For the loan interest one how do I calculate to make sure I would get that back over 3 years? With child tax credits, maxing out 401k and HSA, I'd hate to assume I get the interest back and then don't.

I'd like to keep that money making 4% or whatever it goes to over 3 years rather than paying it all at once.

Thanks!

The loan interest isn't a tax credit, it's a deduction, so you'd take your marginal tax rate and apply it to the amount of interest. So, if you had $6k in interest by 2028, then if your marginal rate is 25%, then you'd reduce your taxes by $1500, total, over those years.

Because the provision is up thru 2028, you could generate more loan interest by doing 48 months, which is both good and bad!

If you want to run different loan scenarios, I use carloancalculator.me

If you're trying to save money, just get it when Tesla is running their low-interest promos. Okay, just looked, the best choice is, add FSD, and pay over 72mos @0.99%. With the normal down of $4999, your monthly is $1109. That interest rate of 0.99% will save you thousands more than the interest rate deduction.

And, you'll still hav $1800 in interest paid by 2028, which you can deduct at your marginal rate, so if 25%, then you've lowered your taxes by $450, total.

At 0.99%, you'll pay $2295, in interest.

Market rate is 5.54%, you'll pay $13,412 in interest. You'd save over $11,000 in interest paid. That difference would be reduced by about $2200, due to the interest rate deduction, but still, you'd be thousands better off, getting the promo rate.

As far as getting the interest rate deduction, my understanding is it's an above-the-line deduction, so you don't have to itemize to get it.

Why am I paying attention? Because I'm due to get some interest deduction for my truck loan too. A little gravy on top of all the other credits, etc.

 

[Griswold]

The loan interest isn't a tax credit, it's a deduction, so you'd take your marginal tax rate and apply it to the amount of interest. So, if you had $6k in interest by 2028, then if your marginal rate is 25%, then you'd reduce your taxes by $1500, total, over those years.

Because the provision is up thru 2028, you could generate more loan interest by doing 48 months, which is both good and bad!

If you want to run different loan scenarios, I use carloancalculator.me

If you're trying to save money, just get it when Tesla is running their low-interest promos. Okay, just looked, the best choice is, add FSD, and pay over 72mos @0.99%. With the normal down of $4999, your monthly is $1109. That interest rate of 0.99% will save you thousands more than the interest rate deduction.

And, you'll still hav $1800 in interest paid by 2028, which you can deduct at your marginal rate, so if 25%, then you've lowered your taxes by $450, total.

At 0.99%, you'll pay $2295, in interest.

Market rate is 5.54%, you'll pay $13,412 in interest. You'd save over $11,000 in interest paid. That difference would be reduced by about $2200, due to the interest rate deduction, but still, you'd be thousands better off, getting the promo rate.

As far as getting the interest rate deduction, my understanding is it's an above-the-line deduction, so you don't have to itemize to get it.

Why am I paying attention? Because I'm due to get some interest deduction for my truck loan too. A little gravy on top of all the other credits, etc.

Thanks for the detailed reply! I'll have to reconsider my options, maybe spring for the FSD but I hate paying even more. I hope to keep this truck 20 years ideally.

 

[CyberT]

Thanks for the detailed reply! I'll have to reconsider my options, maybe spring for the FSD but I hate paying even more. I hope to keep this truck 20 years ideally.

FSD on the Cybertruck is one of the world's great life hacks. If you haven't tried it out yet, then I couldn't recommend it more. For me, it was a non-negotiable feature when buying the truck.

The two main reasons I see immense value in it are

1st: Safety. My wife drives the truck every chance she gets, and since she is (in the nicest way I can say it, as her husband) not a great driver... Knowing that FSD has both of my babies' backs (Wife and Truck) is such a peace of mind.

2nd: Productivity. With FSD enabled, I can make calls, engage in meetings, or catch up on YouTube videos all without worrying that any of these activities will distract me from driving. Until you've tried it, you have no idea.

 

[Griswold]

It's now 0% 60 months with purchase of FSD. How long might that stay around? Or better to wait til end of quarter?

 

[Beetlebug62]

Yep, or 0.99% for 72months. How long? Impossible to say. It's always a bit of a gamble to wait, because you can wait too long, and find yourself without a truck! Having said that, I waited to Mar 24, to pickup on Mar 29th! I cut it close.

 

[ABILISK]

You sound like you’re aware of this, but for everyone else:

The tax credit ends on September 30th. Doesn’t matter if you placed your order days or even weeks ago then one problem or another came up that pushed out your delivery date. If you take delivery on October 1st, you don’t get the credit. That’s a government thing, not a Tesla thing. Tesla seems to have been good about working with people on their internal incentives when their delivery date is slightly late, but that WILL NOT be the case this time. Give yourself plenty of time to work with and, if you’re on the fence, hop over and join the party already!

Oh, and do please consider FSD. I need your truck to help teach mine how to drive better.

 

[Limes2]

@Griswold If you are planning on keeping the truck for 20 years I would highly recommend purchasing FSD now for $8,000 USD. You will not regret it.

 

[Griswold]

Yep, or 0.99% for 72months. How long? Impossible to say. It's always a bit of a gamble to wait, because you can wait too long, and find yourself without a truck! Having said that, I waited to Mar 24, to pickup on Mar 29th! I cut it close.

My hope is to get it early September. I know it's a risk but we'll see if it pays off. Got a few things between now and then, otherwise I'd order right now.

@Griswold If you are planning on keeping the truck for 20 years I would highly recommend purchasing FSD now for $8,000 USD. You will not regret it.

Yeah especially with the 0% financing. Is it realistic to think this will last for 20 years? My main concern is the battery life.

 

[Limes2]

Battery warranty is 8 years or 150,000 miles, which comes first.

I don't think anyone will have issues with a 10 year old battery but 20 years is hard to predict.

I've had cars ICE 15 years old with low miles and little things like hoses, seals...the soft bits end up degrading over time.

Car values drop with time and mileage.

 

[baska]

I've been wondering the same about stacking credits before the deadline. Your approach with the 36-month loan makes a lot of sense, especially if the interest can be offset with a tax credit. I’d definitely recommend chatting with a pro. Liberty Tax was super helpful for me with similar questions last year.

 

[Beetlebug62]

My hope is to get it early September. I know it's a risk but we'll see if it pays off. Got a few things between now and then, otherwise I'd order right now.

Yeah especially with the 0% financing. Is it realistic to think this will last for 20 years? My main concern is the battery life.

20yrs? That's my goal. From the experience with my 2018 Model 3, I'm only down 5%, my only thing is to keep the car at 60%SOC for daily driving. Roadtrips, I charge to whatever level necessary, but at home, it's 60% or less. So, I'm keeping the truck at 60% for daily driving.

 

[kpanda17]

dont forget next 6 months, no -$7500, no 0%, gets AI5, gets next gen 4680
conflicting emotions for today
but the CT will have a next gen FSD compute and longer range next year and it may cost the same as Elon wants to spark demand
therefore:
today $72K no interest loan, 325 mile range AI4
2026 $80K 6% loan with interest deduct, 380 mile range AI5
your choice

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