News You Can Use: January 2019

News You Can Use: January 2019

1Tax credits for buying Tesla and GM Plug in electric cars are ending soon. The maximum $7,500 credit begins to phase out for vehicles manufactured by a car company that has sold over 200,000 cars For the first half of 2019, the max credit for Tesla cars drops to $3,750 for first half of the year and to $1,875 if bought in the second half of the year. After 2019, the credit drops to ZERO. Buyers of GM vehicles get a bit more time. The $7500 max credit drops to $3,750 for cars bought on or after April 1, 2019 and to $1,875 if purchased after September 30, 2019. 

Sandy’s tip: Tesla has quietly lowered prices on its plug ins to partially offset the credit reduction.

2Don’t default on pension plan loans: Normally, you should NOT borrow from your pension plan even though it may be allowable. However, if you do make a loan from the plan, you MUST pay it back or you will be taxed on the proceeds as if it were a distribution. This was the lesson learned by a woman who borrowed $8000 from her workplace 457 deferred pay plan but didn’t make the required repayments. She was sent her 1099-R that reported the unpaid loan balance as a taxable distribution that also resulted in early withdrawal penalties.

3The fines for not having the right health insurance were repealed but ONLY for post 2018 years. Now, you can get your insurance anywhere and don’t need to meet minimum requirements.

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