Tax News Update - 8th Edition
Inflation Reduction Act signed by President Biden
The U.S. Senate and House of Representatives passed the Inflation Reduction Act, sending the legislation to President Biden for his signature. It was signed into law on August 16.
Tax provisions in the bill include several new credits aimed at electric vehicles and clean energy. On the business side, the bill would impose a 15% corporate alternative minimum tax on applicable corporations whose book income exceeds $1 billion for the preceding three taxable year period. The law includes $80 billion in IRS funding over the next 10 years.
The act will also shield Medicare recipients from high drug costs with a phased-in cap for out-of-pocket costs and a $35 monthly cap for insulin. In a first, the act allows for Medicare to negotiate drug prices.
Proposed Tax Legislation
The following is an overview of several recent tax proposals discussed or introduced in Congress over the past several weeks. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.
American Dream Down Payment Act of 2022 (Senate Bill 4722): This bill, introduced Aug. 2, proposes to amend the Internal Revenue Code of 1986 to establish qualified down payment savings programs.
Rent Relief Act of 2022 (Senate Bill 4728): This bill, introduced Aug. 2, proposes to amend the Internal Revenue Code of 1986 to allow for a credit against tax for rent paid on the personal residence of the taxpayer.
Volunteer Driver Tax Parity Act of 2022 (Senate Bill 4691): This bill, introduced Aug. 1, proposes to amend the Internal Revenue Code of 1986 to equalize the charitable mileage rate with the business travel rate.
The above are proposals. There are many steps each bill must go through before they are signed into law. Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342