You may have heard by now that the Inflation Reduction Act was signed into law on August 16. This historic piece of legislation addresses a number of areas.
Chances are, you or your business may be directly impacted. Here are a few highlights of theInflation Reduction Actyou might find helpful to know:
- Medicare: This law sets out to lower healthcare costs for Medicare users over the coming years. Not only will Medicare be able to negotiate the price of certain prescription drugs, but out-of-pocket drug costs are set to be capped at an estimated $4,000 in 2024 and $2,000 by 2025. In addition, the cost of insulin will max out at $35 a month for Medicare users starting in 2023.
- Energy: If you’re interested in going green at home, there are some provisions that may make it easier for you. An $80 million in rebates offers households as much as $14,000 back for choosing certain energy-efficient home improvements. Plus tax credits will go to those installing solar panels or buying qualifying electric vehicles.
- Corporate taxes: Corporations reporting at least $1 billion in profits may face a new 15% tax rate. In addition, this new law imposes a 1% excise tax on stock buybacks by corporations.
- Funding for the IRS: An additional $80 billion is being allocated to the IRS over the next decade. The money is scheduled to be allocated to four main categories—enforcement, operations support, business system modernization, and taxpayer services.
Most of us won’t see a significant impact from this new legislation in the immediate future, but it’s possible you’ll feel its effects in the coming years. If you have any questions, please reach out. Our office is getting a steady supply of material that explains the new legislation, which we would be happy to share with you.