Unpacking the Inflation Reduction Act: What’s in It?
This week, Craig Siminski, of CMS Retirement Income Planning, shares an article providing an overview of provisions that could affect consumers and businesses, including clean energy tax credits, Medicare changes, and new corporate taxes:
About $370 billion will fund new and existing programs that aim to expand renewable energy sources and help mitigate the negative effects of climate change.
This shift in energy policies has the potential to cut greenhouse gas emissions to about 40% below 2005 levels by 2030, according to the administration and several climate models that analyzed the legislation’s environmental impact.
The jury is still out on whether the Act will do much to help reduce today’s inflationary pressures, but it is poised to lower health costs shouldered by the federal government and certain individuals, especially retirees. New revenue comes from taxes imposed on corporations and stronger tax enforcement.
Energy and Climate Initiatives
Starting in 2023, an updated tax credit of up to $7,500 will be available for the purchase of new clean vehicles (battery electric and hydrogen fuel cell) that meet certain requirements. Individuals with modified adjusted gross incomes higher than $150,000 ($300,000 for joint filers) are not eligible for the tax credit. Eligible vehicles with a manufacturer’s suggested retail price higher than $55,000 — or higher than $80,000 for trucks and sports utility vehicles — are excluded.
To qualify for the EV tax credit, new vehicles must be assembled in North America.
For the first time, a new tax credit of up to $4,000 will be available for some pre-owned electric vehicles (EVs) purchased from a dealer.
To qualify, models must be at least two years old with a sales price not exceeding $25,000. Income thresholds for buyer eligibility are…
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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 25 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
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