Getting paid to splurge on a new car sure sounds like something that can only happen in video games. But, believe it or not, you can get Uncle Sam to hand you tax credits for buying a car! And unlike tax deductions that merely lower your taxable income, tax credits directly shrink your tax bill, putting more cash back in your pocket. There’s a catch, though: not every car qualifies for these credits. So, how about that Wrangler 4xe you have had your eyes on? Are you wondering if the rugged, eco-friendly, and adventure-ready whip can earn you some sweet tax credits? Keep reading to find out!
Overview of the Wrangler 4xe
The Jeep Wrangler 4xe is a standout plug-in hybrid electric vehicle (PHEV) that boasts a 17 kWh battery, offering an all-electric range of about 21 miles and a total range of 370 miles.
Why the focus on specifications? Remember, we mentioned that not every car qualifies for tax credits. A vehicle must meet specific criteria to be eligible for these benefits. For instance, electric vehicles often qualify for the EV Tax Credit due to their role in reducing global carbon emissions. But simply buying an electric vehicle isn’t enough.
Eligibility Criteria for EV Tax Credits
The rules for claiming EV tax credits changed with the Inflation Reduction Act of 2022, which affects vehicles bought from 2023 to 2032.
Who Can Get the Credit?
To qualify, you must buy the vehicle for personal use (not resale) and use it primarily in the U.S. Your modified adjusted gross income (AGI) must be below:
- $300,000 for married couples filing jointly or a surviving spouse
- $225,000 for heads of households
- $150,000 for all other filers
Credit Amounts:
For vehicles in use between January 1 and April 17, 2023, the credit includes:
- A base amount of $2,500
- An additional $417 for each kilowatt hour (kWh) of battery capacity over 5 kWh
- Up to a maximum credit of $7,500
For vehicles in use after April 18, 2023, they must meet new mineral and battery component requirements:
- $3,750 for meeting the critical minerals requirement only
- $3,750 for meeting the battery components requirement only
- $7,500 if the vehicle meets both requirements
Vehicles that don’t meet these requirements won’t qualify for the credit.
Does the 2024 Wrangler 4xe Meet the Criteria?
Don’t you agree it’d be fun to burst your bubble with a negative answer? But, unfortunately for humor and fortunately for you, the 2024 Wrangler 4xe meets the EV tax credit eligibility criteria. So, yes, you can go ahead and purchase one if you need it! And enjoy the credit if you meet the criteria mentioned earlier. Remember, purchasing a vehicle only because of credit or deduction is not advisable. But if you need a car, go ahead!
How Much Tax Credit Can You Claim with the 2024 Wrangler 4xe?
According to the U.S. Department of Energy, the 2022-2024 models of the Wrangler 4xe qualify for a $3,750 tax credit. While it’s not the full $7,500 credit, it’s still a nice chunk of change—enough to snag a Taylor Swift ticket and drive to her concert in your brand-new Wrangler 4xe.
Key Takeaway
Thanks to the U.S. tax code, you can enjoy the nice things of life and still save on taxes. That’s exactly what smart business owners do. It is what the likes of Elon Musk and Jeff Bezos do. And no, you don’t have to start making billions to unlock tax benefits. All you need is the right tax strategy, and Tax Goddess is always here to help you with that. So, if you have a wild idea that involves buying a private jet and qualifying for tax benefits, give us a call.
