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What’s in the Inflation Reduction Act of 2022?
August 22, 2022   |   2022 tax year, Doors, Energy Star, Form 1040, IRS, Legislation, Medical Expense, Medical Insurance, Medicare, Obamacare, Tax Credit, Taxes

This is the repackaged “Build Back Better Junior”, passed August 16, 2022 and WON’T reduce inflation. It’s smoke and mirrors. Little/short lived savings. Lot of Government spending and power grabs. If have time, the full text download is available here. It’s light reading– only 273 pages (Sarcasm). Summary of major provisions.

Obamacare: Extends Medical Insurance premium subsidies for Marketplace insurance purchases until 2024 (lower premiums through 2024).
Medicare: Starting in 2026, Empowered to negotiate prescription drug pricing to save money. Affects ten drugs in 2026, 15 drugs in 2027 and 20 drugs in 2029. Drug cost out of pocket Annual cap= 2,000.

Manufacturer drug discount/rebate program for parties paying more than the annual deductible. Program implementation delayed until 2032. . . How does that lower YOUR costs? Note: every program costs. Drug discount plans are already available. Government mandated discount program will increase drug prices.
Insulin products: In 2023 monthly Drug price cap at $35. in 2026 at the lesser of $35 or 25% of the plan’s negotiated price .

Enforcement: $80 billion over the next 10 years for IRS. More than just agents. Computers, software and infrastructure. Some parts of the IRS computer system hasn’t been updated since the 1980s Corporations:For corporations with 1 billion+ profits over three years, minimum 15 percent tax. Analysis: funky accounting to keep under the $1 billion dollar threshold and or shuttling operations to lower cost locales. Also 1% excise tax on stock redeemed (corporations redeem stock to limit outsider control or to boost stock price)

Green Energy/”Lowering Energy Costs [Sarcasm Intended]”
For Manufacturers: outside scope of this writing
For Individuals: Effective 2022 to December 31,2032. Credits up to 30% purchase price for Home energy updates. Careful! Major change. Annual credit limits of $600 for ALL windows installed during year. up to $250 for 1 exterior door or $500 for all exterior doors installed during year. Roof DOES NOT qualify. Possible Credit for Electrical panel upgrades. Heating and cooling property (e.g. furnace/hot water tank) must meet the 2021 Energy Star certification guidelines. WARNING: GOVERNMENT WILL KNOW WHAT EQUIPMENT IS INSTALLED. LAW REQUIRES THE PRODUCT SERIAL NUMBER TO BE ON TAX RETURN. (HR 5376 Section 13301 Provisions (g)(A) & (B) page 128.)
Credit for energy efficient homes and for alternative fuel refueling property (e.g. Electric car chargers).Modifies the refundable credit for purchase of new and used plug in electric vehicles (previously was no credit for “preowned” vehicles) .

Government Spending (Job Security for EPA and other Government Agencies) for: Methane sequestration, renewable energy in rural (poor) communities, Forestry wildfire prevention, Coastal communities for extreme storm preparation,weather research, hurricane hunter aircraft.
EPA to establish a greenhouse gas reduction fund with incentives to replace school buses and dump trucks with 0 emission vehicles (electric). Reduce diesel engine emissions, monitor air pollution, reduce methane emissions. Notes: Buses and dump trucks are specifically targeted for replacement in the legal summary. Expecting to affect semi tractors too if not now, later.
IRS still has to interpret the law and create the forms hopefully BEFORE January 2023 so we can do tax planning etc.
IMHO: I have my thoughts. Just won’t broadcast them on the world wide web. If want to discuss, please email or call me. No opinions by text. too difficult to discuss in 140 characters.
Let us Think, Speak . . . Act (John Adams)

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