How you file a W-4 determines the TAX WITHHOLDING not your TAX LIABILTY.
For examples, lets say your TAX LIABILTY is 2,500.
You can't change that with a W-4 or the number of dependents you claim for withholding.
All you can change is how much tax you pay out of your paychecks.
Your tax liability is calculated on your tax return.
Say you do your tax return and your TAX LIABILTY is 2,500.
Lets say you have 3,000 withholding.
You'll get a 500 refund.
Lets say you have 2,000 withholding.
You'll owe 500.
Same tax liability regardless of your withholding.
You pay the same amount of tax, just one way it is collected throughout the year from your paychecks, the other way you pay LESS throughout the year and the rest when you file.
If you purchase an Electric Vehicle and get a 7,500 credit
and if your tax liability is 2,500
7,500 credit takes the tax liability to zero, 5,000 credit is carried forward
Lets say you have 3,000 withholding.
You'll get a 3,000 refund and 5,000 carried forward.
That 3,000 is just a return of the money you already paid.
If you purchase an Electric Vehicle and get a 7,500 credit
your tax liability is 2,500
7,500 credit takes the tax liability to zero, 5,000 credit is carried forward
Lets say you have 2,000 withholding.
You'll get a 2,000 refund and 5,000 carried forward.
That 2,000 is just a return of the money you already paid.
The credit has the same effect on your Tax Liability regardless of your withholding.
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