… and it even has the WSJ’s imprimatur.
What to Know About the Electric Vehicle Tax Credits, and How to Get More Money Back
Congress designed the income limits as a cliff, meaning once you are over the amount, the credit is gone, says Mark Luscombe, a federal tax analyst at Wolters Kluwer Tax & Accounting. The limits aren’t adjusted for inflation either, he adds.
But there is a potential workaround.
“For taxpayers who are hovering over the limits, it’s not the end of the road. They may be able to benefit from the tax credit with the right tax planning,” says Laura Caiafa, an enrolled agent in Hamden, Conn. A powerful way to lower adjusted gross income is by boosting contributions to a pretax 401(k) retirement account or a health-savings account, she says.
Another way to lower AGI is to max out workplace dependent-care benefits and commuter benefits, says Mr. Luscombe.