This post may perhaps be the most frustrating post I have written on this blog. Back in 2009 when I bought the Roadster, I did not get the federal tax credit of $7,500.
I could have bought the Model S in 2012 but delayed the car purpose solely for tax reasons. I unfortunately took a $5-10K depreciation in my Tesla Roadster during this four month period because of the glut of them on the market when I did eventually sell it.
I directly discussed the tax credit with both my tax advisor and investment advisor in 2012. Because I do not work, I do not have regular income such as salaries and tips and solely rely upon income from investments. Capital gain income does not qualify for this tax credit. My tax advisor told me
“I would buy the car in 2013..as only need to increase your income by $5K to take advantage of the credit”
I worked with my investment advisor and adjusted my investments to ensure that this would happen during 2013.
At the end of 2013, when looking through the results of my investments, the numbers clearly indicated that I had more than enough income in those categories for that tax credit. My tax advisor also has full access through the web to check my accounts and never contacted me. In April, they sent me a deferred tax form because I have K-1s that are issued much later in the year.
In late September, I finally received my completed taxes. The first amount I checked was this electric car credit. I was simply shocked that I only received a third of the amount after this detailed planning.
After a series of emails, my tax accountant indicated that my taxes were simply incorrect as some accounts were not even on the statement! After some discussions with the two professionals, they found a missing account. But even with a large addition of the correct category of income, I was now informed that this income was foreign and did not qualify! At no time did she tell me that I needed to make sure all of this income was generated in the United States. In the end, I only received $200 more of the federal tax credit.
After very clearly stating my point of view, I sincerely feel that my tax accountant was negligent in informing me sufficiently how to obtain this credit. By missing a very important detail such that all the income needed to be generated in the US, I lost this credit. All of the tax accountant’s correspondence historically has been terse.
Fortunately, they did agree to not charge me for this years returns, but I am still underwater for the credit. Needless to say, I will never use this high priced firm again who really is simply a number crunching firm. Although I would rate their service very low, I am not going to name them on this blog.
Ironically I volunteer to do taxes for low income people and did my own taxes for many years. But for some unknown reasons, turbotax actually chokes on my tax information. I currently have four interviews set up with recommended accountants and am going to try to run Turbotax on my 2013 return.