Impact of inflation reduction act, 2022 on tax laws

Impact of inflation reduction act, 2022 on tax laws

Impact of inflation reduction act, 2022 on tax laws

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  • On December 17, 2022
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  • Shishir Lagu

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Shishir Lagu
Equity Partner - US Tax

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Impact of inflation reduction act, 2022 on tax laws

The Inflation Reduction Act 2022 is an essential piece of legislation that aims to reduce the impact of inflation on the economy. This act has far-reaching implications, not least of which is its effect on tax laws.

On August 16, 2022, Inflation Reduction Act (IRA), which includes a new alternative minimum tax, an excise tax on company buybacks, and significant tax breaks for energy and environmental initiatives, was signed into law. The same year they are passed into law, US GAAP also considers changes to income tax legislation and rates. As a result, despite some entities determining that some provisions require accounting in the period of enactment, most of the IRA’s accounting-related requirements will impact financial statements in the future.

The Inflation Reduction Act of 2022 will significantly impact tax laws. By adjusting tax brackets, increasing the standard deduction, and adjusting various tax credits and deductions, this act will help ensure that people are not unfairly penalized by inflation when it comes to their taxes. This is essential to creating a fairer and more equitable tax system that works for everyone.

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