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.

Wait really? I filed my 2021 taxes late last year and I don't think that unemployment exclusion was applied. Can I still amend my return to get that money back?

You can definitely still amend your 2021 return to claim the unemployment compensation exclusion if you qualify! You'll need to file Form 1040-X (Amended Return). You generally have 3 years from the original due date to file an amendment, so for 2021 taxes, you have until April 15, 2025. Keep in mind that the exclusion only applies if your modified AGI was less than $150,000. If you qualify, it's absolutely worth doing since it could mean a significant refund depending on how much unemployment you received in 2021.

Any idea how much a tax professional typically charges for a prior year return? I need to file 2021 too but I'm worried about the cost.

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.

Do you know what the minimum monthly payment the IRS will accept is? I probably owe around $5000 across three years and there's no way I can pay that all at once.

The minimum payment depends on how much you owe, but generally the IRS will accept payments that would clear the debt within 72 months (6 years). For $5000, that would be around $70-100 per month depending on interest and penalties. If you can't afford what they initially propose, you can request a lower payment based on your financial situation. They have a form called 433-F that lets you show your income and expenses to justify a lower payment amount. The key is to request the payment plan upfront rather than waiting for them to come after you.

People rarely go to jail just for failing to file, especially if you're voluntarily coming forward to fix the situation. The IRS generally reserves criminal prosecution for cases involving fraud, tax evasion, or deliberate concealment. Coming forward voluntarily to file back taxes is actually viewed favorably by the IRS. They're much more likely to work with you on payment plans and might even be able to reduce some penalties if you show good faith by filing now.

That's good to hear. I've been stressing out about my own situation with missed filings. Gonna try to get caught up too.

Did you need to bring in any specific documents for the amendment besides the missing 1099-INT forms? And how long did it take for them to process the amendment for you?

You'll need to bring your copy of the original tax return they prepared, the new 1099-INT forms, and your ID. It's helpful to also bring the receipt from your original tax preparation service. The actual appointment only took about 20 minutes since it was a simple change. As for processing time, H&R Block prepared the amendment same-day, but the IRS took about 14 weeks to process it once submitted. That's pretty standard for amendments - they take much longer than regular returns. Electronic amendments are faster (around 8-12 weeks) compared to paper ones (16+ weeks sometimes).

I tried using the free fillable forms for an amendment last year and honestly it was a nightmare. The 1040X seems simple but getting all the calculations right and making sure you're filling in the right columns is confusing. You have to manually input the original amounts, the changes, and the corrected amounts for every line that's affected. I ended up making a mistake on mine that caused a 3-month delay in processing. Not worth the headache for saving $40 on software in my opinion.