Looking to buy

perfectnobody · 11-24-2009, 06:33 AM

Quote:

Originally Posted by Matt

Let's say you make $100,000 this year. If you pay $5,000 in taxes on the Z, then you'll pay taxes on $95,000 of your income in 2010. It's a write-off or "deduction" not a true credit.

New Car Tax Rebate- Obama Economic Stimulus Plan: Cash Back on 2009 Vehicle Purchase, Not Tax Credit on Federal Return | Suite101.com

so basically, they take the amount of tax you pay on a "Z" (i think it's about $3,000 for base plus sports... not 100%) and deduct that from your gross income for the year and you are only taxed on the remaining...

so you are not actually getting$3,000 back, just getting taxed less.

still better than i was expecting in the first place, so it's still great!

370Zsteve · 11-24-2009, 06:36 AM

Quote:

Originally Posted by perfectnobody

so basically, they take the amount of tax you pay on a "Z" (i think it's about $3,000 for base plus sports... not 100%) and deduct that from your gross income for the year and you are only taxed on the remaining...

so you are not actually getting$3,000 back, just getting taxed less.

still better than i was expecting in the first place, so it's still great!

Don't forget that you may wind up in a lower tax bracket after the deduction.

Matt · 11-24-2009, 06:38 AM

Quote:

Originally Posted by perfectnobody

so basically, they take the amount of tax you pay on a "Z" (i think it's about $3,000 for base plus sports... not 100%) and deduct that from your gross income for the year and you are only taxed on the remaining...

so you are not actually getting$3,000 back, just getting taxed less.

still better than i was expecting in the first place, so it's still great!

Yep, not a true credit like the new home buyers get, but still not bad! Especially when you add it up with mortgage interest, charities, etc.

Quote:

Don't forget that you may wind up in a lower tax bracket after the deduction.

I'm going to have to look hard at it this year, more than normal. Because of a substantial raise this year, it'll be the first time I'm even close to the next tax bracket. There may be a few lucky charities out there if math is on their side!

370Zsteve · 11-24-2009, 06:47 AM

Quote:

Originally Posted by Matt

Yep, not a true credit like the new home buyers get, but still not bad! Especially when you add it up with mortgage interest, charities, etc.

I'm going to have to look hard at it this year, more than normal. Because of a substantial raise this year, it'll be the first time I'm even close to the next tax bracket. There may be a few lucky charities out there if math is on their side!

If you are now above $80k income, get ready for sticker shock, Bubba!

perfectnobody · 11-24-2009, 07:19 AM

so after reading this article to try and understand this better... how does this push you up into another tax bracket, i thought it would push you down,

for example (based on article) lets say your total income for the year is $78,000 putting you in the 25% bracket and you get a tax deductible of $3,000 for buying a Z, wouldn't that make your total taxable income $75,000? or is it the other way round with the $3,000 increasing your total taxable income to $81,000 pushing you into the 28% bracket (don't know why it would, maybe someone can clarify)

thanks!

370Zsteve · 11-24-2009, 07:30 AM

Quote:

Originally Posted by perfectnobody

so after reading this article to try and understand this better... how does this push you up into another tax bracket, i thought it would push you down,

for example (based on article) lets say your total income for the year is $78,000 putting you in the 25% bracket and you get a tax deductible of $3,000 for buying a Z, wouldn't that make your total taxable income $75,000? or is it the other way round with the $3,000 increasing your total taxable income to $81,000 pushing you into the 28% bracket (don't know why it would, maybe someone can clarify)

thanks!

You are confused. The $3000 reduction would keep you in the same tax bracket, maybe even put you in a lower one. If your gross income was $81k, you would be taxed at a $78k rate after the tax credit.

perfectnobody · 11-24-2009, 07:37 AM

Quote:

Originally Posted by 370Zsteve

You are confused. The $3000 reduction would keep you in the same tax bracket, maybe even put you in a lower one. If your gross income was $81k, you would be taxed at a $78k rate after the tax credit.

that's what i thought the first time

Quote:

Originally Posted by 370Zsteve

Don't forget that you may wind up in a lower tax bracket after the deduction.

so you meant this as a good thing then...

Quote:

Originally Posted by 370Zsteve

If you are now above $80k income, get ready for sticker shock, Bubba!

i guess i got confused by this, i didn't get the meaning, thought it was a bad thing

thanks for the clarification!

spinhead · 11-24-2009, 08:02 AM

Tax brackets are applied incrementally anyway, it's not a big deal to hit the next one. It's not like all your income will be taxed at the higher level.

11-24-2009, 07:19 AM	#5 (permalink)
perfectnobody Base Member Join Date: Oct 2009 Location: jersey Posts: 36 Drives: Red 370z b w/st 2009 Rep Power: 16	so after reading this article to try and understand this better... how does this push you up into another tax bracket, i thought it would push you down, for example (based on article) lets say your total income for the year is $78,000 putting you in the 25% bracket and you get a tax deductible of $3,000 for buying a Z, wouldn't that make your total taxable income $75,000? or is it the other way round with the $3,000 increasing your total taxable income to $81,000 pushing you into the 28% bracket (don't know why it would, maybe someone can clarify) thanks!

11-24-2009, 08:02 AM	#8 (permalink)
spinhead Base Member Join Date: Nov 2009 Location: N. Bethesda, MD Posts: 162 Drives: 09 370z BS 6MT Rep Power: 3388	Tax brackets are applied incrementally anyway, it's not a big deal to hit the next one. It's not like all your income will be taxed at the higher level.