What’s in the Bill? — Inflation Reduction Act
2 min readAug 24, 2022
Fighting Climate Change
- The Inflation Reduction Act essentially offers incentives in the form of tax credits for companies and individuals to adopt green energy
- By offering these tax credits, the government is encouraging broader adoption and technological innovation
- The hope is this will eventually drive costs down over time, making renewable energy more widely available
Lowering the Cost of Retiree Healthcare
- The bill’s highlights from the consumer’s perspective are the changes to Medicare (not private insurance) drug costs
- Starting next year, insulin costs will be capped at $35 per month
- In 2025, Part D out-of-pocket maximums will be capped at $2,000 per year
Increase Tax Revenues
- Taxes on large corporations — 15% minimum tax on companies with $1 billion or more in profits and a 1% tax on stock buybacks
- Significant increase of budget for IRS tax enforcement
- Additional enforcement of current tax code to increase tax revenue
- While not an increase in individual taxes, it will likely result in more tax revenue
How Will the IRA Impact You?
- The noted decreases in prescription drug costs and caps on Part D expenditures are significant
- You may take advantage of some of the tax credits available for electric vehicles or energy-efficient home improvements
- More likely to be audited due to the increase in IRS tax enforcement
- To avoid tax penalties OR tax shock — estimate your tax bill
