Navigating your business’ taxes after the I.R.A.
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The Inflation Reduction Act (IRA) is a piece of legislation that aims to reduce the impact of inflation on the tax system. One of the main provisions of the IRA is the indexation of tax brackets, which means that the income thresholds for each tax bracket are adjusted for inflation each year. This helps to ensure that taxpayers are not pushed into higher tax brackets due to inflation alone. However, the IRA also has some potential tax consequences for individuals and businesses. For example, the indexation of tax brackets may result in some taxpayers paying higher taxes if their income increases faster than the rate of inflation. Additionally, the IRA may affect the calculation of certain tax credits and deductions, which could result in a higher or lower tax liability for some taxpayers. It is important to consult with a tax professional to understand the specific impact of the IRA on your individual or business tax situation.