Biannual Newsletter: Fall 2023
What's Inside: Tax Updates for 2023, Oregon Credits & Rebates for a Sustainable Home, Oregon Saves MC 40 & MET 40
A Note from Your CPA
As we approach the end of the year, I wanted to take the opportunity to reflect on our partnership and share some insights as we head into the next tax season. Over the past year, it's been my privilege to serve as your Certified Public Accountant. This has been marked by a commitment to sound financial management, proactive tax planning, and a shared dedication to achieving your financial goals. Throughout the year, I've had the pleasure of working closely with you to navigate various financial challenges and opportunities. Thank you for embracing changes that have been made to the firm and growing and learning along side me. I look forward to the coming year and hope that this newsletter offers some insight into what to expect.
-Cameron Clark, CPA
Tax Updates for 2023
Secure 2.0 Act For Small Businesses
The Secure 2.0 Act is designed to make sponsored retirement plans easier and more affordable for small businesses. With this comes increased tax credits for small businesses to plan sponsorship. To qualify, a small business must have at least one non-highly compensated employee (made less than $135,000 in the prior year) with the business and is not the owner. The credit is based on the greater of $250 or $500 per eligible employee applied to 100% of costs incurred. To learn more review this article from ADP.
Inflation Reduction Act
The Inflation Reduction Act of 2022 aims to reduce inflation in several ways including the promotion of clean energy. Three types of tax credits are available to individuals.
The Energy Efficient Home Improvement Credit offers a credit of 30%, up to a maximum of $1,200 for the installation of energy efficient home upgrades. This includes exterior doors, windows, skylights, insulation materials, central air conditioners, water heaters, furnaces, boilers and heat pumps, biomass stoves and boilers, and home energy audits (biomass stoves and boilers have a separate annual credit limit of $2,000).
The Residential Clean Energy Credit offers a credit of 30% with no annual maximum or lifetime limit. This credit can be applied to the purchase and use of solar, wind, and geothermal power generation, Solar water heaters, fuel cells, and battery storage.
For more information on these two credits, visit IRS this site.
The Clean Vehicle Tax Credit offers credits of up to $7,500. All-electric, plug-in hybrid, and fuel cell electric vehicles purchased new in 2023 or after may be eligible for the federal income tax credit. Pre-owned vehicles purchased in 2023 or after are eligible for a tax credit of up to $4,000.
To see if your vehicle qualifies and to learn more, visit this site on fueleconomy.gov.
Oregon Credits & Rebates for a Sustainable Home
Oregon Department of Energy Financial and Incentive Programs
Oregon Solar & Storage Rebate Program
Oregon homeowners can receive a rebate of up to $5,000 for a solar electric system and up to $2,500 for an energy storage system. These rebates are provided through the Oregon Department of Energy (ODOE). The rebates are paid directly to ODOE-approved contractors responsible for installing the solar and energy storage systems. If you're considering installing a solar electric or energy storage system, it's recommended to start by reaching out to an approved contractor who can provide information and guidance about your project.
Energy Efficient Wildfire Rebuilding Incentive
In response to the devastating 2020 Labor Day wildfires that impacted many residential and commercial structures, HB 5006 allocated approximately $10.8 million in General Fund dollars to the Oregon Department of Energy. This funding established a new program aimed at incentivizing energy efficient rebuilding of structures destroyed during the wildfires. The program encourages the use of energy-efficient technologies and practices in the rebuilding process, contributing to more sustainable and resilient communities.
Heat Pump Incentive Programs
Following the extreme heatwave experienced in 2021, which tragically resulted in heat-related fatalities, the Oregon legislature took action to address this critical issue. In 2022, they passed SB 1536, which introduced measures to provide heat relief for residents. This legislation includes rebates and grants for the installation of heat pumps and related upgrades in various dwelling types, such as residential rentals, manufactured dwellings, and recreational vehicles located in rented spaces. To be eligible for these incentives, the installation of heat pumps must be carried out by ODOE-approved contractors, ensuring that the work meets quality and safety standards.
For more information visit this oregon.gov page.
OregonSaves
OregonSaves is Oregon's retirement savings program
This program is available to those whose employer does not offer a retirement plan or those of whom are self-employed.
The standard default rate of savings is 5% of your gross pay which is taken out after taxes have been taken out. You can choose to have a standard annual increase. You can also change your rate at anytime from 1% to 100% as long as it's within IRS limits.
You may be eligible for the Saver's Credit from the IRS if you are 18 years or older, not claimed as a dependent, and not a student. Depending on your gross income, the credit can be 50%, 20% or 10% of select contributions.
To learn more, visit oregonsaves.com or reach out to us with any questions.
MC 40 & MET 40
MC 40 - Multnomah County Preschool for all Personal Income Tax
The Preschool for All tax is 1.5% on taxable income over $125,000 for individuals and $200,000 for joint filers, and an additional 1.5% on taxable income over $250,000 for individuals and $400,000 for joint filers. The rate will increase by 0.8% in 2026.
You can visit Multnomah County's website for more information or reach out to us with any questions.
MET 40 - Metro Supportive Housing Services Personal Income Tax
A 1% marginal personal income tax on taxable income above $125,000 for individuals and $200,000 for those filing jointly.
You can visit Metro's website for more information or reach out to us with any questions.