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Discussion Starter #1
The tax credit only gets deducted from the amount of taxes you owe for the year.
So if you only owe $2,000 in taxes for the year, you will only get a $2,000 deduction, not $7,500
 

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Its not based on how much you owe at year end, its based on how much you paid in. If you are married, the standard deduction is $24,000 ($12,000 if you are single). That means you are probably paying taxes on any income above that $24k (or $12k). Based on current tax rates, a couple making $58k a year (or a single person making around $45k) would pay $7500 in taxes. Either way, I would assume someone in the market for an automobile between $40k - $60k would make more than the amounts above. Granted if you have kids, the formula changes a bit. And you may have some individuals who are retired or semi retired with a large nest egg and little to no taxable income.
 

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You would have to make around $64,000 a year for a single person to get the full credit
$64,000 - $12,200 personal deduction = $51,800
$39,475 x tax rate of 12%= $4,800
$12,325 at tax rate of 22%= $2,711.5
$4,800 + $2,711.5 = $7,511.5
 

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I stand corrected there. The website I was reading showed tax brackets of 12% up to the first 9,700 in income versus 12% between 9,700 and $39,00 in income.
 

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Most of these cars are pretty expensive anyway, so you'd have to already be making a good amount of money in order to even afford the car, let alone get the tax credit.
 
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