Increase tax liability for EV purchase

[Capttrip55]

Looking for advise on a sensible way to increase tax liability to ensure I can take advantage of the full 7500 rebate on an EV purchase. 

gross income was 103k last year in regular earnings and 3k as an independent contractor. This year regular income should be around 108k.  Married filing jointly but wife stays home with 2 kids. 

1040 line 24 total tax was 4800 last year. I assume with the increased child tax credit this year it will be even less maybe.  

so is there a way I can increase my liability this year to take full advantage of the rebate. 

[Critter-3]

Ok first the good news ... since ALL of the increased CTC is refundable NONE of it will be used to reduce the EV credit so you don't need to worry about that on the 2021 return.   Next, to increase your AGI you can earn more, sell stock at a gain(short term preferred), convert an IRA or 401K to a ROTH  among other possibilities so look at the form 1040 for ideas.

[Capttrip55]

Line 16 says tax and it is 8800.

Line 19 is child tax credit of 4000

Line 22 was the 8800 tax minus 4000 child tax credit. So 4800

Line 24 says total tax and is 4800

Which amount would the EV credit come off of?

[Critter-3]

Once again the rules on the 2021 return will be different so the number you would use next year is 8800. 

[Opus 17]

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@Critter-3 wrote:

Once again the rules on the 2021 return will be different so the number you would use next year is 8800. 

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I don't think we actually know the answer to that until the forms come out.  Just because the child tax credit will be fully refundable ($3000 per child) doesn't mean they will change the order in which the credits are applied.  It could still be that the max EV credit for this taxpayer would be $2800 next year.

In any case, since the enhanced child credit will lower your tax one way or another, 2021 would be a good year to take certain steps that will increase your 2021 tax but lower your future tax.

(Note that the "lowering your future tax" part of the equation is critical.  If you can't lower your future tax, then there's no point in paying more tax this year just to "use up" the EV credit.  If your tax before the credit is $2800, and the credit zeroes it out, or your tax is $7000 before the credit, and the credit zeroes it out, you end up the same, except for bragging rights.)

The main thing that comes to mind to increase 2021 income tax and lower future year income tax is to rollover  an IRA to a Roth IRA (Roth IRA conversion), or to change your current retirement contributions (401k at work or private IRA) from a pre-tax basis to an after-tax basis (Roth IRA or designated Roth account within a 401k).