The Inflation Reduction Act (IRA), signed into law in August 2022, represents one of the most impactful pieces of legislation for small businesses in recent years. While its title points to controlling inflation, the Act introduces a wide range of tax incentives, energy-related provisions, and health care reforms that directly affect how small businesses plan, invest, and grow.
As a small business owner, understanding how the IRA can work for—or against—your bottom line is critical. Here’s what you need to know.
Key Benefits for Small Business Owners
1. Expanded Tax Credits for Clean Energy Investments
If your business is considering switching to solar power, upgrading to energy-efficient appliances, or investing in electric vehicles, now may be the time to act. The IRA expands and extends several tax credits for renewable energy use:
-
Energy Efficient Commercial Buildings Deduction (Section 179D)
This credit now covers more small commercial building upgrades and includes improved guidance for tax-exempt entities. -
EV Tax Credit
If your business uses vehicles, qualifying electric and clean vehicles could provide up to $7,500 in tax credits.
2. Lower Health Care Costs
Many small business owners and their employees buy insurance through the Affordable Care Act (ACA) marketplace. The IRA extends ACA premium subsidies through 2025, helping you and your team access more affordable health coverage.
3. IRS Modernization & Enhanced Enforcement
The IRA allocates nearly $80 billion to modernize the IRS, including enhanced enforcement for high-income earners and corporations. While small businesses are not the main focus of increased audits, maintaining accurate records and compliance will be more important than ever.
4. Manufacturing & R&D Support
The Act aims to reinvigorate U.S.-based manufacturing. If your business is involved in manufacturing or research and development, there may be new credits and funding opportunities available.
What Should You Do Next?
Every small business is unique—and so are the opportunities available under the IRA. Whether you’re looking to reduce your tax liability, invest in energy-efficient upgrades, or ensure IRS compliance, it’s essential to speak with a qualified tax advisor who understands the new landscape.
Schedule a Free Consultation with TruTaxx Solutions
TruTaxx Solutions specialize in helping small business owners like you navigate the complexities of the U.S. tax code. Let us help you maximize your benefits under the Inflation Reduction Act and prepare for the future with confidence.