Inflation Reduction Act

on Small Businesses

The Inflation Reduction Act of 2022 was signed into law by President Joe Biden on August 16, 2022, making historic moves towards helping everyday Americans fight against inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40% by 2030. Let’s take a look at what specifically will help small businesses.

What is the Inflation Reduction Act About?

Looking closely at the Inflation Reduction Act, it is aimed to make life easier for small business owners. First, there’s the goal of preserving critical support for small business health care costs. This Act would preserve the American Rescue Plan premium tax credit support for the Affordable Care Act (ACA) plans by extending them through 2025. Based on 2021 tax data, the ACA Marketplace is a source of coverage for 2.6 million small business owners and self-employed adults—small business owners and self-employed people make up 25% of Marketplace enrollment. Since the implementation of the ACA, the uninsured rate dropped from a staggering 30% in 2013 to a much-improved 20.5% in 2019.

The Inflation Reduction Act includes a number of provisions that save small business owners on energy costs, including a tax credit that covers up to 30% of switching over to low-cost solar power. This lowers operating costs and helps protect against volatile energy prices that are squeezing small business owners. Small businesses with a building can receive a tax credit up to $5 per square foot to support energy-efficient improvements that deliver lower utility bills. Small businesses that use large vehicles (like trucks or vans) will reap the benefits of tax credits covering 30% of purchase costs for clean commercial vehicles, such as electric and fuel cell models.

The focus on mitigating energy costs not only helps support small business owners, it also helps combat the climate crisis by focusing on energy-efficient and environmentally friendly usage.

How does the Inflation Reduction Act impact my small business?

So, how do this impact you? 

The Inflation Reduction Act aims to double the Research and Development (R&D) tax credit for small businesses. Pre-revenue startups create jobs and support economic growth through research, discovery, and innovation. This bill aims to level the playing field and will help spur high-impact R&D by increasing refundable research and development tax credit for small businesses from $250,000 to $500,000. Starting in 2023, small businesses may use the credit to further reduce payroll taxes and several other business expenses by up to $500,000 annually, so they can do what they do best: innovate to solve global problems and create jobs nationwide that propel economic growth.

They also boost American manufacturing and competitiveness by opening opportunities for small businesses, spurring on U.S. supply chains which include green technologies like solar, wind, carbon capture, and clean hydrogen. This legislation includes specific tax incentives aimed towards manufacturing materials sourced from the U.S., like batteries, solar, and wind turbines.

It all boils down to greater economic growth for small businesses on a nationwide scale, thus allowing small businesses to get greater tax credits and feed that money back into their business ventures, supporting employees and employers alike.

What now?

If you’re left wondering what to do or how to utilize the Inflation Reduction Act, you can look at the White House website for specifics on the Act, including this page that sources more information about the aid it provides to small business owners. No family or small business making less than $400,000 per year will see taxes go up by a single cent—that is what this Act helps to ensure for average Americans.

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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Inflation Reduction Act

The Inflation Reduction Act signed into law by President Joe Biden in August of 2022 has brought with it a myriad of tax law changes, for individuals and families, as well as for businesses, both small and large. Let’s take a look at what has changed and how you might be able to take advantage of these credits and deductions on your taxes this year.

Individuals and Families

Since the Inflation Reduction Act is centered around clean energy and ushering our country’s infrastructure into the future, it comes as no surprise to learn that the tax law changes this act brings are with regards to clean energy. Individuals and families who are paving the way for clean energy to take a foothold within our culture are given incentives to that end through various benefits such as tax refunds and credits from the US government.

If you have purchased an electric vehicle, either in 2022 or prior to 2022, you might be eligible for the clean vehicle tax credit, up to the maximum credit of $7500. For more information about this tax credit, you can visit the dedicated page for this credit on the IRS website to learn more.

If the home you’ve purchased is energy efficient, or if you’ve upgraded your home with energy efficient appliances, you might qualify for a tax credit as well.

Businesses

Businesses also get tax incentives to improve not only how they manufacture their goods, but to give specific focus to creating products that use clean energy. The list for business tax incentives is long, including such tax credits as the clean electricity production credit, the clean fuel production credit, the energy efficient commercial building deduction, the sustainable aviation fuel credit, and the zero-emission nuclear power production credit, just to name a few. To read the laundry list of various business deductions, visit the dedicated page on the IRS website.

What it All Means

By giving individuals, families, and businesses tax incentives to get on board with clean energy, the US government is paving the way for the energy of the future. There can be no argument that our country needs to wean itself from fossil fuels that pollute our air, land, and water. The only way to bring this new way of living about is to make it attractive to everyone in every facet of life, from the single individual all the way up the corporate ladder. With every level of our society being offered tax credits, deductions, and incentives, there is more likely to be a societal shift in this direction—which is the end goal of the Inflation Reduction Act—to harness electric, wind, and solar power within the next ten years.

This is exactly what the Biden Administration is banking on—a win/win scenario for America’s economy and also for the average American’s pocketbook.

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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Paves the Way For Clean Energy

According to President Biden, the Inflation Reduction Act is “not just about today, it’s about tomorrow. It’s about delivering progress and prosperity to American families.” This act, signed into law in August of 2022, is a roadmap for our country to focus more on clean energy by empowering Americans to innovate new jobs and products that will not only mean more money in American pockets, but also cut back the pollution and policies that have been driving climate change to a crisis point. Over the course of the next ten years, we should be able to see a dramatic shift toward clean energy in the American economy.

Tax Cuts and Relief

Not only does the Inflation Reduction Act set its sights on the future, it also aims to help Americans today. By implementing certain tax cuts and relief programs, this act will end up saving families a great deal of money with regards to their energy bills, if they drive clean vehicles, and have homes that utilize clean energy. Even big businesses that make an effort to invest in clean manufacturing will benefit greatly from these tax cuts. The idea is to make clean living attractive with monetary compensation so that these new habits will become a new way of life. 

These tax cuts and provisions also benefit low-income communities by offering bonus credits to any projects within these areas. These projects will also aim to pay workers higher wages—ones they can live on—as they build our new clean energy infrastructure from the ground up. The goal is that not only will the nation benefit from clean energy, but that those who put it into practice and work to make clean energy mainstream will be compensated accordingly. 

President Biden’s aim is to make higher paying jobs while also shifting our nation more toward clean energy, which will last long after his Administration.

Grants and Loans

The Inflation Reduction Act also offers grants and loans—billions of dollars worth—for any programs that invest and/or implement clean energy. These grants and loans are also designed to help relieve working families in rural areas or other parts of the country that are sometimes overlooked or underprivileged. The Justice40 Initiative, advanced by this new law, is President Biden’s plan to provide forty percent of the clean energy benefits, as well as those of climate, infrastructure, and others, to communities that have been disadvantaged in the past, including rural communities, energy communities, and Tribes.

The Big Picture

Over all, the Inflation Reduction Act is President Biden’s vision of providing well-paying jobs for union workers, lowering costs overall for every American, while addressing the pressing issue of climate change through investing in clean energy. These programs will reward those making an effort in this direction while also further offering grants and loans to programs committed to the same. If we work together and commit to making the world not only a better place, but a cleaner place, our economy, our wallets, and most importantly, our planet, will thrive.

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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On August 16th, 2022, President Joe Biden signed what’s known as the Inflation Reduction Act of 2022. What is it and how will it impact you and your family? In short, this bill aims to make prescription drugs and health care more affordable while also heavily taxing large (and wealthy) corporations in order to fight climate change. Let’s take a look at how this bill might affect you in the years to come.

What’s In the Bill?

The Inflation Reduction Act hits a lot of this country’s pain points and is the culmination of several plans and promises President Biden has given and envisioned over the years. This act has a few large provisions listed below:

Corporate Minimum Tax Rate of 15%

If a corporation brings in an income of at least $1 billion, it will be given the new tax rate of 15%. While this increase is doled out upon wealthy corporations, individuals and households will not be impacted. If corporations participate in stock buybacks, they will also be given an excise tax of 1%.

Reform of Prescription Drug Prices

Beginning in 2025, everyone on Medicare will have a cap placed upon their out-of-pocket prescription drug costs of $2000 annually. Medicare itself will be allowed to negotiate certain prescription drug prices which will result in a lower medication price over all for their beneficiaries. This is likely one of the most significant changes of this bill.

Tax Enforcement of the IRS

For several years, the IRS has complained of being severely underfunded which results in difficulties, and sometimes impossibilities, to perform all of its duties. Over the next decade, the Inflation Reduction Act aims to invest a much-needed $80 billion into the Internal Revenue Service.

A Subsidy Extension for the Affordable Care Act (ACA)

Through the Inflation Reduction Act, the Affordable Care Act subsidies will not expire, but be extended through 2025 until President Biden’s new bill takes effect. If the subsidies hadn’t been extended, upwards of 3 million Americans would likely lose their health insurance.

Climate Change and Energy Security Investments

While this bill focuses on the healthcare industry, it also focuses on reducing climate change. The bill includes several investments regarding the protection of our climate, such as tax credits that help with rising energy costs, tax credits that reward carbon emissions reduction, and pouring investments into producing clean energy.  

Unlikely to Affect Inflation Rates

Despite the name of this bill, it seems the Inflation Reduction Act will not necessarily impact the rising costs of inflation. However, the bill is absolutely vital with regards to climate change and the soaring price of healthcare and prescription drugs. Over the next ten years, we should be able to see a marked change in these two arenas, and that change for the better. The Inflation Reduction Act will likely go down in history as the legacy of President Biden.

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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As a new, budding, or seasoned investor, you might have heard of a REIT. You might even be interested to invest in one. But do you know what they are? Let’s take a look at this seemingly mysterious investment and see if it’s right for you.

Real Estate Investment Trusts

REIT stands for real estate investment trusts. These companies either finance or own real estate that produces income throughout several various property sectors. Companies that deal with real estate must meet the list of standards needed to be considered REITs through certain qualifying requirements. Major stock exchanges do trade most REITs, and these trusts offer several perks to the investors who own them.

If you’re interested in the real estate market, investing in REITs is the way to go. These investments can be added to your portfolio just as you add your other industry investments via mutual funds, ETFs, or individual company stocks. Rather than going out to buy your own real estate to make money, investing in a REIT allows you to earn a share of real estate income by becoming a stockholder instead of a property owner. REITs are prevalent investments for about 150 million Americans through their IRAs, 401(k), pensions, or other means of investments.

What Investments Are in REITs?

Real estate investment trusts hold several types of property, including hotels, medical facilities, offices, apartment buildings, data centers, cell towers, retail centers, warehouses, and various infrastructure. When investing in REITs, you’ll find several focus on certain types of properties, however their portfolios hold varying kinds of real estate.

REITs make money by collecting rent on their real estate properties through leasing the space. With this income, the company pays dividends to its shareholders. Of their taxable income, about 90% of it must be paid to these shareholders, yet most REITs end up paying 100% of their income. The shareholders, then, end up paying income tax on their dividends.  

Are REITs a Good Investment?

REITs are indeed a good investment. Their payouts have been consistent historically, by delivering total returns that are competitive. This is determined by high and solid income through dividends over the long term with capital appreciation. If you want to diversify your portfolio, REITs are the way to go, as they have a low correlation when compared to other assets. Ultimately, they reduce your risk while subsequently increasing your returns. Both of these are very good things. 

Over the past 45 years, REITs have provided proven dividends that grow and are reliable. When coupled with long-term capital appreciation through increasing stock prices, REITs have become quite the attraction for investors through return performance when compared to the rest of the stock market, bonds, and the like. 

It definitely pays to invest in REITs and if you’re thinking about it, go ahead and dip your toe into the real estate market. These investments have proven themselves to be excellent contenders for building generational wealth.

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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2023 Recap

The Financial Family Reunion Summit 2023 was held online on February 11, 2023, and we are humbled and energized at the fabulous turn out! If you missed it you can visit our page dedicated to the Summit and learn more about our speakers and what we discussed. It was an amazing time with a marvelous group of people. Let’s take a look.

Attendance, Speakers, and Sponsors

Can you believe we had 632 Black and brown households register for our Summit? Of that number, 122 Black and brown households were in attendance. We can’t tell you what a blessing and an honor it was to educate these households about investing, building generational wealth, and so much more. 

Our speakers included well-known Black voices such as Ryan Boyles of the NFL, Ollen Douglass of The Motley Fool, Karrie Carden of Equip Advisory, Joshua Samuel of Coins for College, Raine Sellers, a financial analyst, and our very own Ruby Taylor of Financial Joy School. 

We were able to keep the event free of charge for the public due to our fantastic financial sponsors, and we’d like to give them a special thank you. Our sponsors include Trust & Will, the Nasdaq Entrepreneurial Center, and the Navy Federal Credit Union. 

Congrats to the Winners!

During our Summit, a few lucky households won our cash investment prizes. Let’s give a big round of applause to our winners:

• 1st Spin: Wayne Wheatley
  • $200
• 2nd Spin: Zhane Broomfield
  • $150
• 3rd Spin: Daniel Rayford
  • $200
• 4th Spin: Dr. Jackman
  • $1300
• Book Winner: Danielle Phillips; Book: Me Power by Dr. LaNysha Adams

What Our Attendees Had to Say

It is so good to hear from the Black and brown community with events such as these, to encourage and applaud all of us for getting educated together and taking that first step to growing our generational wealth. Here is some of what our attendees had to say about the Summit:

“Thank you for having events like this to help our communities learn about amazing companies like Financial Joy School!” ~Bria 

“My son and I really enjoyed the event. It was very informative.” ~Marie Roker-Jones

“This was amazing, Ruby! I enjoyed every moment. The kids are excited to sign the Pledge. My husband had started conversations about money: savings, investing, earning, and donating, and they really got into. Thanks for your leadership in this space.” ~Dr. Charmain Jackman

“Thank you so much for the awesome seminar!!” ~Wendy Hammond

A Financial Success

We’re calling our Financial Family Reunion Summit 2023 a huge financial success! If you didn’t get a chance to register or attend, don’t worry—we hold our Summit every February during Black History Month. What better time to celebrate our future by remembering how far we’ve come? Thank you to everyone who made our Summit great, and congratulations to all our winners. 

Here’s to next year!

To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.

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