On August 16, 2022, President Biden signed into law the Inflation Reduction Act (IRA), which represents the largest investment the country has ever made to fight climate change. Also included in the $430 billion spending-and-tax package are provisions intended to reduce consumers’ healthcare costs, lower the federal deficit and bolster the IRS’s taxpayer support services and compliance efforts. Following is a brief overview of some of these provisions impacting consumers.
The new law incentives consumers to reduce their carbon footprint and adopt clean-energy solutions via the extension and introduction of a series of tax credits and rebates. It is important for taxpayers to recognize, however, that the availability of some of these credits is subject to limitations, based on such factors as the taxpayers’ modified adjusted gross income. Some of these credits include:
The new law gives Medicare the power to negotiate the costs of prescription drugs directly with pharmaceutical companies. For example, beginning in 2023, seniors with Medicare Part D coverage will pay no more than $35 per month for insulin. Moreover, the annual out-of-pocket costs for these seniors will be capped at $2,000 beginning in 2025.
For Americans who buy health insurance coverage on federal and state exchanges established by the Affordable Care Act, the bill extends for three years expiring healthcare subsidies that have kept out-of-pocket plan premiums at a minimum.
The professionals with Provenance Wealth Advisors keep a watchful eye on legislation and evolving IRS guidance to ensure our clients maximize opportunities for building wealth while maintaining tax efficiency and compliance.
About the Author: Scott Montgomery is a director with Provenance Wealth Advisors, an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs, and a registered representative with Raymond James Financial Services. For more information, call (954) 712-8888 or email firstname.lastname@example.org.
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Scott Montgomery is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC.
Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors + CPAs. PWA is not a registered broker/deal and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters.
You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult with your financial advisor about your individual situation.
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Posted on September 1, 2022