The Inflation Reduction Act of 2022 (IRA), amended the energy efficient home improvement credit under §section 25C of the Internal Revenue Code (Code) and the residential clean energy credit under §section 25D of the Code. These FAQs provide details on the IRA's changes to these tax credits, information on eligible expenditures, and examples of how the credit limitations work. In this update to the FAQs, questions have now been separated by Code section. Through Dec. 31, 2022, the Energy Efficient Home Improvement Credit had a lifetime credit of $500 . As amended by the IRA, for years after 2022, the credit is increased, with an annual credit of generally up to $1,200 (per taxpayer per taxable year), but with no lifetime credit limit. (More)

As winter approaches, many Massachusetts residents, particularly in the colder regions, may contemplate relocating to a warmer climate (or to lower-taxed states). While relocating may seem appealing, it’s essential to understand the legal and tax implications tied to changing your state residency, especially regarding income taxes. Residency status directly influences eligibility for state programs, tax liabilities, and other matters. Understanding Massachusetts’ residency rules — set forth by the Massachusetts Department of Revenue and Massachusetts General Laws — is crucial for anyone considering a move. Massachusetts relies on two primary tests to determine residency: the statutory residence test and the domicile test. (More)

The SECURE 2.0 Act has significantly changed retirement savings rules in recent years. Those changes include but aren’t limited to, a new RMD age and increased access to 401(k) plans for part-time workers. And there’s more. Starting next year, SECURE 2.0 enhances catch-up contributions for certain older adults. If you’re 60, 61, 62, or 63 in 2025, you may be able to leverage this provision to increase your savings for retirement. These contributions could also lower your taxable income and potentially reduce your overall tax liability. Here’s what you need to know about how the new “super catch-up contributions” will work. (More)

When tax time rolls around, figuring out which types of income you need to report to Uncle Sam can be confusing. Adjusted gross income, taxable income, investment income, interest income — all of these have an effect on your tax liability. And understanding what each calculation involves can help you minimize what you owe or develop a better tax strategy for next year.Let’s take a closer look at what is considered taxable income, how to calculate it, what effect it has on your tax rate, and how to reduce your taxable income. In the simplest terms, taxable income is the portion of your earned and unearned income that is subject to income taxes.  (More)