Have you heard? The Inflation Reduction Act was signed into law on Tuesday, August 16. While the $430 billion package includes many provisions, we thought we'd highlight three key areas where you may benefit the most.
New legislation can come with benefits as well as new complexities. If you have questions that we can help answer, please feel free to reach out.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax professional.
Pell vs. non-Pell: Loan forgiveness of up to $10,000 is available to non-Pell Grant recipients and up to $20,000 for Pell Grant recipients. Only Federal student loans are able to be forgiven. Loans held through a private lender are ineligible for this program.
No Surplus: The amount of student loan forgiveness available depends on how much you still owe. If you only owe $8,000 in federal loans but qualify for $20,000 of relief, you will not be receiving the surplus of $12,000.
Income Cap: Borrowers with pandemic-era salaries under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) are eligible for relief.
Loan Dates: Federal loans taken out after June 30, 2022, do not qualify for loan forgiveness.
Application Process: Depending on your lender, you may already be approved and have your account credited by the end of the year. However, an application is expected to be released in the coming weeks before the student loan payment pause ends on December 31, 2022.
Be Aware: As more details are released, scams may also pop up. Remember to practice caution and good business sense if someone contacts you about your student loans.
The IRS May Send You One of Two Notices If Your Filed Returns Don’t Match Their Records
Have you wondered what happens if the information on your tax return doesn’t match the IRS records? The IRS mails out two notices, CP2100 and CP2100A, to banks, credit unions, businesses, and payers that may have made a mistake on their return.
The IRS mails these notices out twice a year, in September/October and April of the following year. Payers may receive a notice if their return is missing a Taxpayer Identification number, has an incorrect name, or both. The notices also tell payers that they are responsible for backup withholding.
* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov
A rain gauge collects rainfall each day of a wet week beginning on Monday. Every day, the amount of rain in the gauge doubles. At Sunday’s end, the rain gauge is completely filled. So on which day is it half-filled?
Last month’s riddle: You have 9 seemingly identical cubes before you. You are told that one is heavier than the other eight. Using a two-pan balance scale only twice, how can you pick out the heaviest cube?
Riddle answer: Divide the 9 cubes into 3 groups of 3. Weigh two groups. This way, you can find out which group has the heavier cube in it. Choose 2 cubes from this group and compare their weights. By deduction, you will determine the heaviest cube.
SEPTEMBER 2022 Newsletter: Three Ways the Inflation Act Could Impact You
September 06, 2022