If you make less than $400,000 a year, your taxes shouldn't be affected by Manchin's new $700 billion deal

The new deal struck by Sen. Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer will not affect taxpayers who make less than $400,000 a year.

The Inflation Reduction Act of 2022, which Manchin agreed to back in a surprise move announced Wednesday, states that it wouldn't raise taxes for people with less than $400,000 a year in income. The plan is to enforce a hard limit on how much big corporations can lower their taxes in order to generate more money for the US.

A minimum corporate tax limit of 15% would be imposed on companies that make $1 billion or more a year.

Around 200 of the biggest companies in the US use tax loopholes to pay less corporate tax than they should, according to a summary.

Climate action reforms and rebates worth $369 billion would be funded by the extra money from the corporate tax changes.

The bill would allow the IRS to better enforce tax laws and conduct improved audits of companies and millionaires, as well as generating more money for the federal treasury, according to lawmakers. They estimated that a strengthened IRS would be able to collect an additional $203 billion to help reduce the US deficit.

The bill excludes additional taxes on people who make $10 million or more per year, signaling an end to the push for higher taxes on millionaires.

The bill is part of the economic agenda of the president. Biden made his support for the deal known.

The action the American people have been waiting for is what Biden said was happening. High health care costs and overall inflation are some of the problems addressed by this.

Tax savings for homeowners and car buyers

Some of the bill's climate action reforms could affect American households.

There is a $4,000 tax credit that electric-vehicle buyers could claim on cars priced at $55,000 or less, as well as trucks, vans, and SUVs.

The bill states that families with adjusted gross incomes of $300,000 or less are eligible for the credit.

The bill would give tax breaks to taxpayers who make their homes more energy- efficient. If a home's remodeling saves at least 34% energy, low- or moderate-income households will be eligible for a $8,000 rebates. The rebate would be capped at 80% of the cost.

It is possible for other homeowners to get up to $4,000 or 50% of the cost of the renovation.