Required Disclaimer: you are not a tax lawyer, you’re not MY tax lawyer, etc.
Optional Mini-rant: I tried calling the IRS but apparently they don’t answer these type of questions anymore except during tax season. I looked up going to my local IRS office, and they would let me go in to the local office, sit in front of a computer screen and talk to a representative – who doesn’t answer this type of question except during tax season. grrrrrrr… :mad:
So. I’m thinking of buying an electric car and I’m trying to find out how to take advantage of the electric car tax credit. Here’s my situation:
[Importantly] I have owed NOTHING in federal taxes in the last 2 tax years because my deductions have kept me below the minimum income at which you owe taxes.
I retired 3 years ago at age 62.
I have NO wage income.
I get Social Security and a very small amount of pension income.
I get some dividend and interest income from my investment / retirement money.
I have significant money in IRAs.
I have significant medical expense deductions, since I have paid for my own insurance. (I go on Medicare in October.)
I’m an Arizona resident.
If I buy an electric car and qualify for this juicy tax credit, how do I take advantage of it? (I know it doesn’t carry over if I don’t use it this year.) So here are my questions:
- Does the tax credit apply only to wage income, or will it equally apply to dividend, interest, capital gain income, etc?
- Can I generate taxable income by selling stock and use the tax credit to cover it?
- Can I convert some traditional IRA money into a Roth IRA and use the tax credit to cover the taxes?
- Can I withdraw money from an IRA and use the tax credit to cover the taxes?
- Which of these ways of generating taxable income would you consider the best?
- I’m assuming that using the tax credit is to my advantage. Can anyone make a reasonable case for why I should forego trying to use the tax credit?
Looking forward to hearing your comments,