Along with the new-year comes New Year resolutions. If you are looking to make 2022 better than it was in 2021, starting off on a good note is important. That might mean putting money into retirement accounts or keeping better track of the business or personal records.
Let’s start with retirement.
- Maximum contributions to 401k’s increased to $20,500 and Simple IRA plans increased to $14,000. You can put even more in if you are 50 or older.
- Maximum contributions into Roth or traditional IRA’s stays at 6,000, with an extra $1,000 if you are 50 or older.
- The plan here is to put more away in 2022 than you did in 2021.
- Increase the amount by putting 1-2% more in your 401(k).
- But really try to put in as much as your company matches! Get the free money while you can.
What about Health Savings Accounts?
- If you have a high deductible plan and have the option to contribute to your Health Savings Account, do it.
- The Maximums for 2022 are $3,650 for a single plan and $7,300 for a family plan.
- More if you are 55 or older.
- This is a way to get a deduction for paying your medical expenses.
- With the increase in the standard deduction, not many people are getting deductions for itemizing.
- You can get the medical bill. Put the money into the HSA and pay the bill using those funds right away. It only has to stay in the account for a short period of time to get the deduction.
- But the real plan here is to maximize it, let it grow and use it later to pay medical expenses.
Helps to keep good records right?
- Yes it does in general and for HSA’s.
- Keeping good records for your business will allow you to get every deduction possible.
- So the plan here is start early while it is still fresh in your mind rather than trying to recreate it later when your memory is not as good.
Stay on top of tax changes.
- Some of the legislation in Washington may be dead for now, but that can quickly change.
- That is where we come along. We will be each week to talk about what’s happening with tax law changes to keep you informed.
- And as always, you can go to our website, your favorite podcast site or even YouTube to hear any shows that you missed.
Be sure to talk to a tax professional if you have any questions about getting off to a good start in 2022.
As a partner, I have thorough experience providing tax services to individuals, privately held businesses, nonprofit entities and estates and trusts. I also provide compilation and review services.
