Exclusive Strategy for Anomaly CPA Clients

• When laws are signed quickly, there are usually “technical errors” that will need to be corrected (or not)!
• Mindset: Tax Law changes are not all bad. There are opportunities and incentives for ALL taxpayers.
  • These do not make the media headlines
     

Individual Strategies: Tax Credits

Home Energy Credits (starting in 2023) 

1. Max $1200 PER year. Currently is a $500 lifetime limit

1.  $600 for windows
2.  $250/$500 for doors
3.  $150 towards audits

2. Make these improvements to PRIMARY residences in 2023 or after.

1. Use $500 (if unused) in 2022 and then immediately continue in 2023!

Residential “Clean Energy” - Usually SOLAR

1. Immediate upgrade to 30% for 2022 and after! 
   
   1. Ex) $20,000 solar panels = $6,000 $ for $ tax reduction
2. Energy Storage Systems added (not as common)

AUTOS AND CLEAN VEHICLES

1. Changes start in 2023
2. Up to $7500 Credit for clean vehicles. MUST be manufactured in the USA
   1. $80k price limit for SUVs/Trucks
   2. $55k limit for cars
   3. Can treat as purchase price reduction…?
3. Taxpayer income limits = $300k MFJ; $150k single (cliff)
4. New $4,000 credit for pre-owned/used clean vehicles

Business Strategies

AUTOS AND CLEAN VEHICLES

1. Changes start in 2023
2. 30% of price as a credit, up to $7500 UNLESS the vehicle is >14k lbs. Then the credit increases to $40k!
3. NO INCOME LIMITS! If you own a business and can use the auto in your business, this is a better credit than the individual credit.
4. You can also bonus depreciate or 179 the vehicle, less the credit

REAL ESTATE

179D and 45L - Big wins!

1. 179D is for >4 units OR commercial. 45L for <4 units multifamily
2. 179D allows for a “bonus deduction” for energy efficient upgrades to property as a $PSF. This is INCREASING from $1.88psf to $5psf!
   1. Often a missed opportunity that can go along with Cost Segregations…
3. 45L = extended and energy star homes or small properties can get a $2500 credit up to $5k with strict requirements. Worth looking at!
    

IRC 48 - Solar on Business Assets

1. If and only IF a property you own is a trade or business, it is possible to add solar to your property:
   1. 30% tax credit
   2. Bonus depreciation (80% in 2023)

Note - this is a facts and circumstances based analysis

IRS Funding & Audits

The IRS is not hiring 80,000 auditors next year!

1. The $400k limit is not authoritative.  This is guidance from the Secretary which can change with political appointments
2. Your best protection is always documentation, documentation, documentation
3. IRS letters will likely increase as the backlog loosens.  Coming weeks we will discuss how to interpret these pesky letters!