The IRS announced 2022 cost-of-living adjustments for the following:

Retirement Account Contributions

  • 401(k) plans are increased to $20,500 (up from $19,500 in 2020/2021)
    • Catch up contributions are unchanged at $6,500 for those age 50 and older
  • Annual contributions to an IRA remain unchanged at $6,000 (additional $1,000 for eligible catch-up contributions), but income limits are increased to:
    • Roth IRA income phase-outs for contributions are increased to:
      • Single and Head of Household: $129,000 to $144,000
      • Married Filing Jointly: $204,000 to $214,000
    • Traditional IRA income phase-outs (for the individual not covered by a workplace retirement plan) for contributions are increased to:
      • Single and Head of Household: $129,000 to $144,000
      • Married Filing Jointly: $204,000 to $214,000
    • Traditional IRA income phase-outs (for the individuals that are covered by a workplace retirement plan) for contributions are increased to:
      • Single and Head of Household: $68,000 to $78,000
      • Married Filing Jointly: $109,000 to $129,000
      • Maximum deductible SEP contribution: $61,000

 

Miscellaneous

  • Gift Tax Exclusion โ€“ amount is increased to $16,000 per person in 2022
    • Consider super funding a ยง529 Plan โ€“ lump 5 years of contributions at once ($80,000)
  • Estate โ€“ 2022 unified exclusion amount is $12.06 million.
  • Health Savings Accounts Contribution Limits:
    • Family: $7,300
    • Self-only: $3,650
    • Catch-up: $1,000 for taxpayers over 55 years old
  • Business Mileage Rate increased to 58.5 cents per mile for 2022

 

Tax Credits

  • Solar Credits (REEP)
    • Property placed in service between 1/1/2021-12/31/2022 = 26%
    • Property placed in service between 1/1/2023-12/31/2023 = 22%
    • After 2023 = 0%
  • Business Meals
    • For business meals in 2021 and 2022 at a full-service restaurant (either dine in or take out) the deduction is 100%
  • Child Tax Credits
    • Credits revert to pre-2021 amounts of $2,000 per eligible child
  • Child and Dependent Care Credit
    • Dependent Care Benefit maximum contribution for 2022: $5,000
  • Qualified Plug in electric vehicle credit up to $7,500
    • Confirm the credit available per manufacturer here

 

 

Dana R. Borys, an Accountancy Corporation is a boutique tax consulting, compliance, and representation firm working with affluent individuals and owners/officers/founders of start-up/emerging growth companies. Building connections beyond the code.