2022 brings new tax and saving changes that could impact your finances. Updates include standard deductions, retirement-plan contributions, estate, and gift tax changes are the federal government’s effort to the American people feel fewer effects of record-high inflation. Read below or watch Casey’s interview on WRTV Indianapolis to learn more about how you can make adjustments to maximize these changes.
- The IRS is changing and boosting tax brackets which is normal for them to do to combat inflation. This year it’s going from 1% in 2021 to 3% 2022 due to inflation indexing. The adjustment will reduce the amount of taxes deducted from paychecks and raise take-home pay.
Standard Deduction
$12,950 – Single
$25,900 – Joint
Tax rates on capital-gain and dividend taxable income
0% Up to $41,675 (Single) / Up to $83,350 (Joint)
15% $41,676 to $459,750 (Single) / $83,351 to $517,200 (Joint)
20% $459,751 or more (Single) / $517,201 or more (Joint) - The IRS is also changing the maximum amount taxpayers can contribute to their 401ks, increasing it by $1,000. he top tax-deductible contribution to a 401(k) for savers under age 50 will rise to $20,500 from $19,500 in 2021, about 5%. For non-qualified contributions to IRAs and Roth IRAs, the limit will remain $6,000 for people under age 50, due to rules preventing increases until there is a $1,000 increment. The income thresholds for these tax breaks will be higher for most taxpayers, however.
Retirement-plan contribution limits
– Traditional or Roth IRA $6,000, plus $1,000 for age 50 and older 401(k) or
– Roth 401(k) $20,500, plus $6,500 for age 50 and older
– SEP IRA or Solo 401(k) $61,000, plus $6,500 for age 50 and older, for Solo 401(k) - Social security checks are increasing This is the biggest boost in 40 years on average, Social Security beneficiaries are seeing an extra $92 a month
Bonus Information - Estate & Gift Tax changes
Lifetime exemption – $12,060,000 per individual
Annual exclusion $16,000
So a lot of things to be watching for. This is the beginning of some pretty high inflation, and I think this is going to continue for a while. Interest rates are responding, and they’re going up as well, so I think folks are going to have to get used to higher prices for a while.
Inflation and rising interest rates are causing millions of people to rethink their budgets or plans for retirement. Now more than ever, people in the great state of Indiana need a financial advisor they can trust. To help, Crown Haven Wealth Advisors is offering a limited number of spots for our free financial planning sessions.
Our team is happy to meet with you online or in our offices in Carmel, IN. Stop stressing about money or how you will pay for the retirement you always wanted. You deserve a secure financial future. Click here to schedule a complimentary relationship visit or call (317) 564-4691 to speak with one of our specialists.