Stephen Merritt, CPA, PC  |  Certified Public Accountants  |  (757) 420-5778
233 Business Park Drive, Suite 104, Virginia Beach, VA 23462

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What’s Inside

• The Inflation Reduction Act: Electric Vehicle Credits
• 10 Ways to Slow Down in Business (and Why You’d Want to)
• January Days
• Office Hours
• COVID-19

The Inflation Reduction Act: Electric Vehicle Credits

Are you considering buying an electric vehicle in 2023? The rules have recently changed, due to the passage of the Inflation Reduction Act of 2022 (the “Act”) in the summer of 2022. This bill included a range of new tax rules addressing various areas, and one of its significant goals was to address climate change and jump-start clean energy production. In this article, we’ll specifically cover the portion of the bill that includes updates to the electric vehicle credits available.

Under the Act, existing electric vehicle (EV) credits have been expanded and modified. Although credits of up to $7,500 on the purchase of a new EV have been available for several years (with some limitations), the existing rules have been changed to make them more available to middle income taxpayers while also ramping up domestic manufacturing of EVs and their related components such as batteries.

Overall, there are now three EV tax credits available:

1. [Revised] IRC 30D qualified plug-in vehicle credit, renamed to the clean vehicle credit

The maximum credit remains at $7,500; however, there are income limits for qualifying automobiles placed in service after December 31, 2022.

Any vehicle placed in service after August 16, 2022 must have final assembly in North America in order to qualify (with a transition rule for any contracts entered into between January 1, 2022 and August 15, 2022).

After 2023, taxpayers can elect to transfer their credit to treat it as a payment to the dealer.

When purchasing an EV, be sure to request for your salesperson to give you the necessary tax information you need! For some manufacturers, the assembly location may vary depending on the specific vehicle and trim, and for that reason, it’s advised to ask the salesperson for the VIN of the car that you plan to purchase.

The Department of Energy has provided a VIN lookup tool that can be used to verify this information for a particular vehicle. Consumers can refer to a list published by to determine which models have final assembly in North America:

https://afdc.energy.gov/laws/electric-vehicles-for-tax-credit

2. [New] IRC 25E previously-owned clean vehicle credit

A credit is now available for used EVs. Previously-owned clean vehicles placed in service after December 31, 2022 and before January 1, 2033 may qualify for the credit.

The credit is a nonrefundable credit equal to the lesser of $4,000 or 30% of the vehicle sale price.

There is also an income limit to qualify for this credit (with much lower limits than the 30D credit), and the sale price must be $25,000 or less.

3. [New] IRC 45W qualified commercial clean vehicle credit

This credit is available for commercial clean vehicles placed in service after December 31, 2022 and before January 1, 2033. The credit is 15% of the vehicle’s basis but increases to 30% for a vehicle not powered by a gasoline or diesel combustion engine, and it cannot exceed $40,000 (with other possible limitations).

There is no income limitation to claim it, but there are other requirements regarding the vehicle type and type of clean energy used. A taxpayer cannot claim the credit for a vehicle for which the taxpayer received the IRC 30D credit (#1).

Check with your tax professional to learn more about the new/revised electric vehicle credits and how they impact your specific tax situation.

10 Ways to Slow Down in Business
(and Why You’d Want to)

Sometimes we just need to slow down. It could be our body telling us it needs a break. It could be our mind experiencing the first signs of burnout. Even if you own your own business, you are subject to burnout, especially if you are a people pleaser or say “yes” to everyone!

But how do we do that? It might have been so long since we’ve changed our pace, we don’t know where to begin. Here are some tips on the best ways to slow down in business.

1. Eliminate wasted time.

Take a deep look at your to-do list. Identify one task that you’ve always done that adds nothing to your business. Does it really need to be done? Try to find tasks that don’t make any sense to do any more that you’re still doing just because you’ve always done it.

You should be able to free up a lot of time! For now, use it to slow down. Take a nap, call a friend, visit your employees with no agenda and really listen, take a walk and smell the roses, or simply hug your child.

2. Get off electronics.

A friend recently suffered from a concussion and her doctor told her to stay off electronics to help her brain heal faster. She limited herself to one hour a day for two months. What would you do if you had to stay off electronics? My friend read all the paperbacks she had that she hadn’t gotten to (for 15 years), cooked more, went shopping for things she had wanted for years, took walks, and learned a new language.

If you spend any time on social media, eliminating it even partially can be a huge pickup in time. Getting off electronics and using that time to get back into nature is healing for everyone.

3. Get enough sleep.

If you are sleep-deprived, everything takes longer. Slowing down and getting enough sleep each night can make you more productive, reducing your work hours. Plus, you just feel more refreshed.

4. Gain a new perspective.

Slowing down your normal routine can help you gain perspective. You might have been fighting fires in the trenches for so long, you’ve forgotten why you’re in business to begin with. Take time to re-connect with your mission, vision, and purpose. Make sure your employees understand their grander goals as well.

5. Avoid multi-tasking.

Almost everyone thinks they are good at multi-tasking, but it turns out science says only a minority percentage of people can really multi-task effectively. Become self-aware of your own habits related to multi-tasking. Do things take longer when you multi-task? Do you make mistakes you have to go back and correct when you multi-task? If so, you may be in the majority of people who simply shouldn’t do it.

6. Stop worrying about billable hours (for service businesses) – at least for a while.

If you are really fixated on billable hours, you may need to just let them go for a while until you can get your perspective back. There is more to life and business than billable hours.

7. Re-connect with your business community.

If there has been no time to connect with your co-owners, customers, and employees, slowing down can provide that time. The most important thing is to simply show up and listen. You will learn a lot!

8. Make time for strategy.

If your business is headed in the wrong direction, that is the ultimate time-waster! Slowing down allows you to re-visit your strategy, making sure you are working on the right projects, that you have the right company culture, and that your business goals are in alignment with your big-picture purpose.

9. Do nothing.

It’s really okay to do nothing when you’re the business owner. You need time to come up with ideas, think about the hard issues, and even daydream. You have to stop working in the business so you can work on the business.

10. Get better at managing distractions.

If you get interrupted every five minutes, you will be drained of energy at the end of your work day. Get smart about managing interruptions so you can be more productive. This will free up more time for you to take breaks and slow your pace during your workday.

Try at least a few of these ideas to slow down before your mind or your body insist on it.

January Days

Here are some Days to Remember in January!

January – Monthly Awareness

Here are just some few things that are observed monthly in January:

National Blood Donor Month

Cervical Health Awareness Month

Mental Wellness Month

Poverty Awareness Month

January 1st – New Year’s Day

A time of optimism, planning, and resolutions! Every New Year’s there’s a feeling of change: more rest, better eating habits, more exercise, new place or new job. Take a moment to get ready for the new year and set some goals for yourself!

January 16th – Martin Luther King, Jr. Day

Every year, the third Monday in January is when we observe Martin Luther King Jr. Day and reflect on the work done for racial equality. Martin Luther King, Jr. was an influential civil rights leader – his life and achievements are remembered and celebrated on this day.

January 22 – Chinese Lunar New Year

This year is the Year of the Rabbit, more specifically the Water Rabbit. The sign of the Rabbit is a symbol of longevity, peace, and prosperity. People born in a year of the Rabbit are believed to be vigilant, witty, quick-minded, and ingenious. 2023 is predicted to be a year of hope.

Rabbit Years: 1939, 1951, 1963, 1975, 1987, 1999, 2011, 2023

January 26 – National Spouses Day

Other than Valentine’s Day, this is the only worldwide holiday that gives couples a chance to spoil each other. It’s a chance to celebrate your spouse and show them they are appreciated.

January 30 – National Croissant Day

The croissant originated in Austria, known as “kipferls”. A baker named August Zang had a patisserie in Paris where he made kipferl. His Parisian version though was made flakier and Parisians began to call them croissants due to the crescent shapes.

Louis has some solid New Year’s resolutions

Office Hours

Tax Season Hours Begin January 2, 2023

Monday – Friday

8 AM to 5 PM

Coronavirus Disease (COVID-19)

Stephen Merritt, CPA, P.C. understands the challenge the impact COVID-19 has on our community.

Fully-Vaccinated individuals are not required to wear a mask while in our office.

Unvaccinated or not Fully-Vaccinated individuals must wear masks and follow COVID-19 protocol, such as social distancing, while in our office to stop the spread of COVID-19.

Tax documents may be mailed, FAXed, emailed, uploaded to client portal, or dropped off.

Final Returns can be picked up or mailed out.

As always, please call, we are happy to assist.

Stay safe and healthy!