Income Tax On Rebates?
#1
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Income Tax On Rebates?
I heard a tax guy on the radio today say that the car makers file a form 1099 on rebates. That means you have to pay income tax on the rebate.
Anyone receive a 1099 from DC on your rebate?
Anyone receive a 1099 from DC on your rebate?
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Thats new info to me Rick. I didn't get a 1099 on mine and they don't have my social. It seems to me that the rebate wouldn't be considered earned income, but rather a manufacturers blanket price discount. Sort of like a 10% off sale.
#3
From IRS publication 525, a cash rebate on a car is NOT income. See pg 26, "cash rebate":
http://www.irs.gov/pub/irs-pdf/p525.pdf
http://www.irs.gov/pub/irs-pdf/p525.pdf
#4
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From IRS publication 525, a cash rebate on a car is NOT income. See pg 26, "cash rebate":
However, depending on how the dealer writes up the deal and how the state sales tax law reads, you may end up paying sales tax on the rebate. Specifically, if the taxable selling price is determined to be the price BEFORE rebate, then you're paying sales tax on the rebate amount. But, if the dealer is allowed to deduct the rebate from the selling price, then there would be no sales tax on the rebate amount. I'm sure each state's taxing authority makes it clear to dealers how to handle these things - because if it comes out on an audit that they are doing it wrong, the dealer becomes liable for the tax if they cannot later collect it from you.
Neil
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Thanks guys. Good to see that info in print from an IRS publication.
I had to pay state sales tax on on my $1800 rebate on my Ford.
Neil, haven't you received your truck yet? According to "Hindsight" mine is in Laredo today.
I had to pay state sales tax on on my $1800 rebate on my Ford.
Neil, haven't you received your truck yet? According to "Hindsight" mine is in Laredo today.
#7
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Rick,
Nope. Dealer called last night and said it shipped yesterday. Insight doesn't show it on the train yet. ETA is 4/13, but that seems optomistic - just as well, though, because my FB 45-day wait ends on 4/8.
I wasn't sure what the Calif. State Board of Equalization did with the rebates. However, I'm not surprised that the rule favors THEM. I guess that makes the incentive that combines the 0% - 48mo deal is looking better - they can't tax THAT!
Neil
Neil, haven't you received your truck yet? According to "Hindsight" mine is in Laredo today.
I wasn't sure what the Calif. State Board of Equalization did with the rebates. However, I'm not surprised that the rule favors THEM. I guess that makes the incentive that combines the 0% - 48mo deal is looking better - they can't tax THAT!
Neil
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