How Much Money Will Inflation Reduction Act Save You? Here’s How To Do the Math

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The $739 billion Inflation Reduction Act was signed into law by President Biden on Aug. 16, which aims to curb inflation and reduce the national deficit by $305 billion over the next decade, ABC News reported. The law takes steps to lower health care costs, levies a 15% minimum tax on large corporations and includes the largest investment in domestic energy production.

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However, ABC News noted that the legislation will impact everyday Americans’ wallets almost immediately.

A federal agency will be empowered to negotiate with health insurance providers over the prices for prescription drugs under Medicare, which should cut the cost of some drugs for seniors. There’s also a $2,000 limit on out-of-pocket costs beginning in 2025 for people enrolled in Medicare Part D, the prescription drug plan for seniors.

According to The White House, there are also several clean energy and electric vehicle tax credits and discounts to help put the nation on track to meet President Biden’s climate goals.

Make Your Money Work for You

If you want to determine the financial benefits of the new law, ABC News reported that Rewiring America, a nonprofit that aims to achieve energy efficiency, built a calculator to help make households aware of how much money they’ll get through the incentives available to them in this law.

To use this calculator, enter personal information about the location, size and income of your household. The calculator will share all available savings through the measure.

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.
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