In your example, if I only can use $6,000 of the credit, do I lose the other $1,500 forever or can I carry it to next year?

Unfortunately, you lose the remaining $1,500 forever. The EV tax credit cannot be carried forward to future tax years. If you don't have enough tax liability to use the full credit in the year you purchase the vehicle, the unused portion is simply lost. This is why it's so important to understand your tax situation before making a purchase decision based on the credit.

Income itself doesn't directly determine your EV credit, but it does affect your tax liability, which determines how much credit you can use. If you make $40k, your federal tax liability might only be around $3-4k (depending on deductions, filing status, etc.), so you could only use that much of the $7,500 credit. At $100k income, your tax liability would likely exceed $7,500, meaning you could use the full credit.

That's really interesting about the accountable plan! I've never heard of this before. Do you know if there's a specific way I should approach HR about it? Is there any official documentation I can refer to when explaining this?

The best approach is to frame it as a win-win for both you and the company. When you talk to HR, mention that accountable plans are recognized by the IRS and allow the company to deduct these business expenses while providing tax-free reimbursements to employees. For documentation, refer them to IRS Publication 463, which covers accountable plans. You could also point out that many companies are implementing these plans specifically for remote workers since the pandemic. I created a simple one-page proposal explaining the basic requirements: proper business connection, timely substantiation of expenses, and returning excess amounts. My HR was actually grateful since other employees had been asking about similar arrangements!

That's actually a really smart approach. What kind of documentation did you need to provide for the Lifetime Learning Credit when using your home office equipment for courses? Did you have to get anything from the course providers?

Do you think this rises to the level of actual fraud though? I mean, she did provide incorrect information, but is misreporting health insurance coverage really something they prosecute for? I'm trying to gauge how serious this is.

It likely wouldn't rise to the level of criminal prosecution unless there were other serious issues with the return. The key distinction is between a mistake and willful misrepresentation. If she knowingly provided false information, that technically constitutes fraud, even if the direct financial impact is minimal. That said, for just health insurance misreporting without tax impact, the practical risk is relatively low. The IRS has limited resources and focuses enforcement on cases with significant revenue impact. Still, the safest approach is filing an amended return with the correct information to avoid any potential issues.

That's a really good point. I had a completely accurate return last year that took over 8 weeks, and I got no explanation. My friend filed the same week and got his refund in 10 days. The systems seem pretty random sometimes.

Thanks for your input, but I'm actually dealing with a larger amount - the refund was around 3,800 CAD, and the exchange rate has changed enough that the loss is more than $300. I'd prefer to do things by the book, especially since I'm planning to apply for citizenship in a couple years and don't want any tax issues to complicate that.

Fair enough. For amounts over $200, it's probably worth reporting correctly. Just wanted to point out that sometimes the tax benefit isn't worth the extra paperwork, but in your case it makes sense to get it right.

That's actually a good point. I use the XE Currency app to track exchange rates and set alerts when they hit certain thresholds. CAD has been trending up a bit lately against USD compared to last year.

Thanks for pointing this out! My wife does have an SSN since she's been working with her F1 OPT. Do you know if making this election means we'd have to keep filing jointly every year going forward? Or can we choose differently next year?

That's good she already has an SSN - that will make the process much smoother. Regarding future years, the election remains in effect for all future tax years until it's terminated. You can terminate it in several ways: either spouse can revoke it by filing a statement, it automatically terminates if either spouse dies, you get legally separated under a decree of divorce or separate maintenance, or the IRS can terminate it with notice to either spouse if they determine that information to determine tax liability is inadequate. So yes, you're essentially committing to joint filing going forward unless one of those termination events occurs. That's why it's important to consider the long-term implications before making the election.

I tried doing this in TurboTax last year and it was a nightmare. It technically can handle it, but you have to know exactly what you're doing. The software doesn't really guide you through the 6013(g) election process clearly. For the capital gains, you can manually enter them in TurboTax, but again, you need to know exactly where to put everything.