topic Electric vehicle federal tax credit W4 adjustment in Deductions & credits

Electric vehicle federal tax credit W4 adjustment

user17 — Tue, 22 Oct 2019 17:38:50 GMT

I am eligible for $7500 federal tax credit for purchase of electric vehicle. Year to date my federal tax payment is much more than $7500. Can I update my W4 to not withhold any more federal taxes?

Re: Electric vehicle federal tax credit W4 adjustment

maglib — Tue, 22 Oct 2019 17:54:09 GMT

you don't give enough information as to what your tax liability is. A $7500 credit and $7500 paid in may or may not meet your tax liability.

You can always update your w-4 and claim more exemptions but, do note if you did not have enough taxes paid in you could end up subject to interest and penalties depending on your income level. Failure to pay proper estimated tax - when you don’t pay enough taxes due for the year with your quarterly estimated tax payments, or through withholding, when required:

Estimated tax payments are generally required, if you expect to owe at least $1,000 in tax after subtracting withholding and refundable credits.
Generally calculated on Form 2210
We calculate the penalty separately for each required installment. The number of days late is first determined and then multiplied by the effective interest rate for the installment period.
See Publication 505 for more information.
See IRS News Release IR-2019-55 or IRS News Release IR-2019-24 (Farmers and Fishermen) to determine if you meet the criteria for a waiver of this penalty for your 2018 taxes.

Re: Electric vehicle federal tax credit W4 adjustment

user17 — Tue, 22 Oct 2019 19:32:12 GMT

My federal tax liability is 18k. Year to date I have paid 16k in federal taxes.

Re: Electric vehicle federal tax credit W4 adjustment

maglib — Tue, 22 Oct 2019 19:39:00 GMT

You should be able to fix your w-4 to decrease taxes withheld then as you expect to owe less than $1k.

https://turbotax.intuit.com/tax-tips/tax-refund/top-5-reasons-to-adjust-your-w-4-withholding/L8Gqrgm0V

You can claim as many allowances as warranted by your personal situation. Another way to increase your withholdings is to put the actual amount you want deducted on Line 6 (“Additional Withholdings”) of the W-4.

So you can increase the allowances claimed......don't forget to fix it for next year though.

Re: Electric vehicle federal tax credit W4 adjustment

user17 — Tue, 22 Oct 2019 20:40:18 GMT

Must the $7500 credit be used only at tax time?

If I owe $18k in federal taxes for this year and I have a $7500 tax credit. Doesn't that mean I owe $10500 tax and I can stop tax deduction from my paycheck for rest of this year as I have already paid $16k?

Re: Electric vehicle federal tax credit W4 adjustment

maglib — Tue, 22 Oct 2019 20:43:04 GMT

did you read my last answer? Yes and I gave you how and a link....

Re: Electric vehicle federal tax credit W4 adjustment

ColeenD3 — Fri, 14 Feb 2020 17:14:58 GMT

@petesnh

Do you have a question?

Re: Electric vehicle federal tax credit W4 adjustment

Haroonpir — Wed, 15 Dec 2021 19:25:28 GMT

It seems the w-4 form has now changed, and there is no more allowances.

Would anyone know how to adjust your new W-4 for a $7500 tax credit?

Re: Electric vehicle federal tax credit W4 adjustment

Critter-3 — Wed, 15 Dec 2021 20:58:18 GMT

If you are looking to adjust for 2021 this late in the year then DON'T ... if you don't change it back in January you will be really sorry next year.

Use the Tax Withholding Estimator on the IRS web site to figure out what you and your husband should each put on the W-4 forms that you give to your employers. It's much easier than using the worksheets on the form. It will let you adjust your withholding to get the approximate refund amount that you want.

Tax Withholding Estimator

Re: Electric vehicle federal tax credit W4 adjustment

Haroonpir — Wed, 15 Dec 2021 23:24:30 GMT

No. The w-4 is for next year. My job is making me fill a new one out due to new payroll company, and I am completely lost on exactly what I'm suppose to do. The Tax Withholding Estimator is not helpful as it is making a estimate based on last year's pay.

Does anyone have a good idea on how to calculate the number yourself? Is there a tax withholding estimator on TurboTax?

Re: Electric vehicle federal tax credit W4 adjustment

jxinleblanc — Wed, 15 Dec 2021 23:31:18 GMT

@user17: If you want to stop payroll withholding for the rest of the year, you can submit a W4, write "Exempt" in the space below Line 4(c). But like @Critter-3 mentioned, remember to submit a new W4 in January next year, so you don't get in trouble for not withholding in the new year.

Re: Electric vehicle federal tax credit W4 adjustment

Haroonpir — Wed, 15 Dec 2021 23:31:59 GMT

Also, it looks like the Tax Withholding Estimator only shows me how much I will owe, not what to fill out my W-4 as.

Re: Electric vehicle federal tax credit W4 adjustment

Critter-3 — Thu, 16 Dec 2021 12:14:53 GMT

Then you will need to fill in the W-4 using the worksheets on that 4 page form. https://www.irs.gov/pub/irs-pdf/fw4.pdf

If you are single and have no other job and no dependents simply click on the single box and leave the rest of the form blank. Put your name on the top, sign the bottom and hand it in.

Re: Electric vehicle federal tax credit W4 adjustment

watertania — Wed, 27 Jul 2022 16:05:58 GMT

Good morning

Yes I do have an question in regards to adjusting my W4 in order for me to take out federal withholdings with hurting my net pay as much.