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.
$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
- 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 you know interest rates are responding they’re going up as well and so I think folks are going to have to get used to higher prices