How do you create tax liability for tax credits?

That's the best one sentence explanation I have seen

 

I don't think the answers so far has addressed this original question.

I also have enough Federal Tax withholding every year so I receive tax return in April.

The Question is:
If I am going to again receive tax return in April 2018, am I qualified for the $4,500 Federal Tax Credit for buying a new Prius Prime in 2017?
If NOT, what can I (or the OP) do before 12/31/2017 to receive this $4,500 (or partial) tax credit?

 

receiving a return simply means you paid more than you owed.
what matters is, did you owe at least $4,500. for the whole year? if so, then you qualify. it doesn't matter how much you already paid. i know, it's confusing. it has been answered several times, in several ways. consult a tax pro.

 

In other words, the original question is impossible to answer, as it doesn't provide the information that is necessary to answer the question.

 

Little late now however you look at it.

 

And asked and answered in multiple other threads in much greater detail.

 

I might be getting it.
From earlier post by Fuzzy 1, $43,522 income creates -------> $4502 in Federal Income Tax
Let's say in 2017 if I made and reported over $100K, I should owe more than $4,502 Federal income tax. Therefore, I am qualified to receive the Federal Tax credit for Prius Prime.
Additionally, I should not be confused by the paid more than I owed form the tax withholding.

I am too cheap to consult a tax pro.

 

Sam Spade got it down to three sentences so I will quote him:

"Your tax liability is the amount that you WOULD HAVE OWED if you did not withhold anything and did not make quarterly payments. Your credit cannot exceed that amount. Your total tax liability has NOTHING to do with the amount that you pre-paid.

 

gobbledegook

 

Or win a lottery, sell your investment for a profit, change job and earn more salary... etc, etc, to
create tax liability

 

Music to a tax lawyer's ears

 

At this stage, your are still confused about the terminology.

'Tax return' is different than 'tax refund'. You never receive a return, instead you file a return. The tax returns are the forms and reports you file with the government. Refunds are usually the overpayments from your paycheck that the governments sends back to you, but certain types of credits can create larger refunds than the amounts withheld and taken from your paycheck.

But this plug-in credit cannot create a larger refund. At the very best, you get refunded only as much as your employer withheld from your pay.

Now you are getting closer. But note carefully that the numbers I posted don't apply if you are married, have kids, or are in any of very many other tax situations.

Based on the confusions so far, this cheapness could well become a very expensive.

 

Yes the question HAS been answered in several different ways, culminating in this:

If you don't understand that, you need to see a professional tax preparer. Further discussion here is not likely to help you any.

 

I just got married in September. Based off of a calculator I found online if I am married and filing jointly with our gross income combined our tax liability is almost $14,000.

I have paid almost $10,000 into federal ( my job is commision based, so I get taxed about 40% on a big part of my income ) taxes this year while my wife has paid just about $4,500 ( I didn't realize she had a 2 on her W4, good thing I pay so much tax... )

So between the both of us we have basically paid in just enough to cover the $14,000 that we are liable for.

Based off of this information and those numbers we should receive a receive a refund of about $5,000 ( $500 from over-payment and $4,500 from the Prius tax credit )?

There are other factors that will change the numbers but I just want to make sure I'm understanding this correctly.

 

Correct.
Total Tax = Tax Liability (14000) - Tax Credit (4502) = 9498. Total tax cannot be less than zero.
Refund = Witholdings (10000 + 4500) - Total Tax (9498 from previous line) = $5002.
If your witholdings were less than your total tax, you would need to pay the difference (additional amount you owe) when you file your taxes.

 

Then you are plenty good for this credit.

Based on the information here, that sure sounds correct to me.

 

It’s a credit not a deduction. The IRS sends you the money even if you pay zero taxes.

 

No not for purchases this year. It’s a nonrefundable credit against what your total tax liability with no check if you don’t owe enough.

The revision signed by Biden takes effect for purchases after Jan 1, 2024 and will be refundable and will provide a check regardless of the size of your tax liability.

In fact the IRS will allow car dealers to collect the $7,500 directly reducing the buyer’s sale price starting in Jan.

 

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