President Biden Signs Inflation Reduction Act (IRA) into Law

President Biden Signed The Inflation Reduction Act (IRA). Now, it is the law!

The bill’s passage was many months in the making and at times appeared unlikely with a 50-50 Senate and midterm elections fast approaching. It accomplishes long-held Democratic goals of lowering prescription drug costs, investing in transitions to clean energy, and reforming the nation’s tax code.

Key Areas:

  • Introduce a Corporate minimum tax rate of 15% for profits over $1B
  • Expand the COVID relief for ACA premiums until 2025
  • Increase cleaner production and reduce carbon emissions by roughly 40% by 2030
  • Increase IRS funding by $80B to expand the audit rate
  • Lower Medicare & pocket drug costs

What’s the impact of this?

  • Your previous tax planning strategies may no longer offer the same incentives (i.e., Oil & Gas Investments)
  • If your gross income is above 400k per year, you may see an increase in your taxes in the coming year.
  • It will also limit out-of-pocket drug expenses for seniors on Medicare to $2,000 annually and allow Medicare to negotiate with drugmakers on prescription prices.
  • Provides $80 billion in funding to the IRS, allowing the agency to hire thousands of agents and revamp decades-old technological systems.
  • The new law provides $369 billion to fund energy and climate projects to reduce carbon emissions by 40% in 2030.

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