What's in 2024? Planning to buy an EV?
SettleWise Plus! Read this before buying EV. What's in 2024?
Market: The stock market edged closer to its record high, but some potential risks may be looming for investors. The banking sector was expected to provide some clues about the economic outlook for 2024, but the results were mixed. Delta beat earnings estimates, but its shares fell 5% on Friday, possibly due to the rising oil prices amid tensions in the Red Sea. Crypto prices soared after the SEC approved the first spot bitcoin ETF.
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Recent economics events and what we can expect in 2024.
As we start 2024, let's catch up on recent economic events that might affect your plans for this year, in simple terms.
Bank Updates:
JPMorgan Chase made a lot of money last year, up by 32%. But Citigroup lost $1.8 billion and plans to layoff 20,000 employees. Bank of America's profit dropped by 56%, and Wells Fargo made more money but also spent more than expected. It doesnt look good as a whole.
Prices Going Up:
In December, things we buy got a bit more expensive (0.3% more). The core prices, which exclude food and fuel, went up by 3.9% for the whole year. It's a bit less than before, but we need to watch if the Federal Reserve changes interest rates because of this.
Tech Companies Changing:
Amazon and Google had to let go of some workers. Amazon laid off hundreds, and Google cut around a thousand jobs. Keep an eye on how these changes might impact the tech world and overall job market. Remember, Fed is targeting for a higher unemployment.
Expert's View on Money and Prices:
Experts warns that inflation (prices going up) might stick around 3%, even though others thought it would go down to 2%. This could be because of problems with shipping and people earning/spending more money.
The country's debt is now a massive $34 trillion. Experts says we're borrowing money to pay debts, and this could cause issues. Politics and fights inside the country might make it harder for the U.S. to manage its money.
Experts worried that if interest rates (the cost of borrowing money) go up, it could make things harder for everyone. Even though the economy looks okay now, they think we need to be careful.
#SettleWiseStance – As you go through 2024, understanding these money and job changes will help you make good informed decisions. We'll keep you updated on what's happening in simple terms. This year not a year to spend lot of money but to save and keep investing. There might be a good opportunity waiting out there.
Know this before you decide to buy an EV in 2024
Many subscribers expressed their desire to buy an Electric Vehicle. As we venture into 2024, there are significant updates regarding the $7,500 tax credit for electric vehicles. The changes aim to make the credit more accessible, but it comes with some shifts in qualifying models. Here's a breakdown of what you need to know:
Instant Rebate Option
Starting January 2024, purchasing an electric vehicle (EV) comes with a new perk – an instant rebate. No longer do you need to wait for the next tax season; instead, after a bit of paperwork at the dealership, the credit becomes available as cash on the day of purchase.
Income Cap and Attestation
While this change makes accessing the credit quicker, it's essential to note that buyers must still attest that they are under the income cap, buying the vehicle for personal use, and intend to use it in the United States. The income cap is based on modified adjusted gross income, which includes certain deductions.
The AGI income caps for new vehicles are:
▪ $300,000 for married couples filing jointly
▪ $225,000 for heads of households
▪ $150,000 for all other filers
Note that adjusted gross income (AGI) is not the same as total income (your salary before any deductions) or taxable income (which is AGI minus standard or itemized deductions). It's definitely confusing. Let's say you're single. Your salary is $160,000 a year. You may think I don't qualify because I'm over $150,000. But 10 grand contributions to a 401(k), for instance, could easily mean your AGI is actually under the limit.
No Tax Liability Requirement
Unlike before, you can now get the full $7,500 tax credit regardless of your tax liability. This means even families with no tax liability can benefit, making the credit more accessible.
Made in America and Price Cap Requirements
To qualify for the tax credit, vehicles must be assembled in North America and have a sticker price of less than $55,000 for cars and $80,000 for SUVs and trucks.
Battery-Sourcing Requirements
There are two separate credits, each worth $3,750, related to battery materials and manufacturing. The aim is to encourage a domestic supply chain for critical minerals and components, lessening reliance on foreign sources.
Qualifying Models
The list of qualifying models is dynamic and subject to change. Some notable vehicles that still qualify include the Chevy Bolt EV and EUV, F-150 Lightning, Rivian R1T and R1S, and certain versions of the Tesla Model Y. Some versions of the Tesla Model X and Model 3 qualify, but not all of them (most significantly for bargain-hunters, the cheapest Model 3 no longer qualifies.). And some popular models like the Nissan Leaf and Mustang Mach-E no longer qualify. You can check fueleconomy.gov for a list of eligible vehicles.
Leasing Advantage
Leasing an EV brings fewer restrictions. Leased vehicles are eligible for a version of the tax credit that is easier to qualify for, with no requirement for vehicles to be made in America, no price cap, and no income caps. The credit goes to the company leasing out the vehicle, not the person driving it. But companies typically do pass along the discount in some form.
Used EV Tax Credit
Prices of new EVs seem daunting? Surprise, you will get tax credit for buying used EV too. For 2024, from model year 2022 or earlier, there's a tax credit. It's worth 30% of the sales price, up to $4,000.
This tax credit has a much lower income cap: $150,000 for a household, $75,000 for a single person. Again, that's adjusted gross income.
Commercial Tax Credit
Business owners can explore a separate commercial tax credit for EVs, providing up to $7,500 for a light vehicle and up to $40,000 for a larger vehicle used for business purposes.
As the EV landscape evolves, Settlewise remains committed to keeping you informed and empowered in your journey in the United States.
Drive ahead with knowledge!
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