Agent Orange: Friendly fire that keeps on burning. | So you buy a $50K tesla and get a $7,500 tax credit that can but doesn't always reduce your taxes by $7,500. Second scenario, you buy a $50K pickup and find yourself in a 25% tax bracket, then you need to figure in 14% SE tax, making your federal effective rate 39%. You take sec. 179 on the pickup and your taxes are reduced by .39 X $50K. Not dollar for dollar but effectively you just saved $19K+ on taxes you didn't have to pay because you bought a pickup. As you say, a big difference * |