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Are you thinking about purchasing an electronic vehicle? Don’t purchase the EV until you read how you can save thousands. Are you maximizing your tax savings with electric vehicles (EVs)? Here’s a streamlined guide to ensure you don’t miss out on potential savings, whether you’re buying, leasing, or considering a used EV for your business.
- Clean Vehicle Credit: This credit can be a game-changer, offering up to $7,500 for new EVs purchased in North America. However, it’s laden with qualifiers regarding your income, the vehicle’s cost, and its domestic content—restrictions that might narrow your options or exclude you altogether. For example, the income cap remains unchanged in 2024, disqualifying joint filers earning over $300,000, and individuals over $150,000. Vehicle price caps are set at $80,000 for SUVs and trucks, and $55,000 for other vehicles.
- Leasing: If buying a new EV seems restrictive, leasing might be your best route. It circumvents many clean vehicle credit limitations, allowing dealers to claim the credit and potentially pass the savings to you through reduced lease terms. This option is growing in popularity, offering flexibility without the commitment to older technology.
- Used EV Credit: A more accessible route may be purchasing a used EV, which isn’t bound by the same stringent requirements as new vehicles. If you’re considering this cost-effective option, remember the vehicle must be at least two years old and purchased for under $25,000 to qualify for a credit up to $4,000.
- Commercial Clean Vehicle Credit: Specifically for business use, this credit is free from the non-commercial constraints of income or price caps. It could mean up to $7,500 in credit, depending on the vehicle’s business use percentage and other criteria.
Navigating these options can be complex, and timing is critical, especially as the tax year draws to a close. Implementing a strategic approach not only ensures compliance but optimizes your tax benefits.
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