Client Alert
Inflation Reduction Act 2022 Energy Tax Incentive Considerations
The Inflation Reduction Act of 2022 (P.L. 117-169; 8/16/22) could easily have been named the Energy Incentives Act of 2022. Over 20 provisions in the Act provide tax credits or special deductions to encourage the production and use of clean energy. The cost of these energy provisions over ten years is about $271 billion. In contrast, the ten-year revenue projection for the corporate AMT and one percent excise tax on certain stock buybacks is about $296 billion. Most of the energy credits are for businesses and are specialized such as for the production of clean hydrogen or sustainable aviation fuel or zero-emission nuclear power production. Four credits are designed for individuals including three revised credits and one entirely new one (§25E, Previously-owned clean vehicle credit). This article highlights key aspects of the credits and special energy provisions as a whole, offers tips for dealing with the complexities that exist in these IRA 2022 rules, and provides suggestions to help individuals obtain the greatest tax savings from the new and revised energy credits and rebates. A few charts are included to aid in understanding these credits.
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Making Smarter Retirement Account Distributions by Asking When, Why, and Where
As a proactive client, you often ask your tax professional about the tax effects of taking distributions from your retirement accounts. Unfortunately, it seems that proactive clients are in the minority. More often, your tax professional only learns about your retirement account distribution when the Form 1099-R arrives with your other tax documents. Proactive tax planners can improve their tax savings strategies by asking the when, where, and why that can help reduce negative tax consequences and can make you look like a problem-solving rock star to your clients. Whether you are looking for proactive ideas to implement on your own, or you want to be a problem-solving rock star with your tax planning clients, keep reading to learn how to make smart retirement account distributions.
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The Wild West of Employee Retention Credits (ERC): Outlaws, Deputies, and Cowboys
Gather ’round, pardners! The Employee Retention Credit (ERC) has been the latest gold rush in the tax frontier, drawing business owners, tax deputies, and even a few sly outlaws. But as the dust settles, the IRS—our law keeping sheriff—is on the hunt for any who might’ve bent the rules. In this frontier of finance, knowing who’s who can keep you out of trouble as the IRS rounds up dubious claims.
Selected Techniques to Monetize Tax Attributes
In the prior article “Tax Trends in M&A and What It Means for Your Clients,” we had discussed certain techniques to, e.g., maximize net operating loss (“NOL”) and interest expense deduction utilization in the context of M&A transactions. This article examines certain additional strategies to monetize expiring, latent, or otherwise disallowed tax attributes.
Do Those Tricks Really Work?
On the website for Axium Wealth, Charles Dombek tells us that: “Most CPAs are historians that tell their clients how much they make, how much they owe, when and where to file their taxes, and oftentimes how to write large checks at the last minute when you least expect.” When it comes to Axium, though: “We help clients recover dollars they unnecessarily pay in State and Federal income taxes.” Axium also helps clients diversify capital into off-market passive real estate and alternative investments. Before Axium, there was The Optimal-Financial Group LLC. Of course many of the readers of Think Outside The Tax Box are CPAs, or EAs or others who both help their clients be compliant and advise on ways to minimize their liability. When I was practicing I would call the things I might suggest my “bag of tricks.”
