News you can use
Infrastructure Bill - Tax Provisions
Infrastructure Investment and Jobs Act, the legislation was approved in the House and is on the desk to be sign by the President Biden. There are only a few tax provisions in this infrastructure bill that passed, however more extensive changes will be coming in 2022. One of tax provisions is that the Employee Retention Credit (ERC) has ended for wages paid after September 30, 2021 (except for wages paid by an eligible recovery startup business). Other two tax provisions include increased reporting requirements on brokers who deal with crypto current assets and adjustments as to who qualifies for disaster relief. For more information on provisions that are not directly tax related in Infrastructure Investment and Job Act please click on the link below.
Special $600 tax deduction even if you do not itemize
Taxpayers who do not itemize generally do not get tax benefit of making cash contributions to qualifying charitable organizations. Included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, The Internal Revenue Service has allowed up to $300 in charitable contribution to be deductible above the line, meaning that even if taxpayer does not itemize, they still can take the deduction. This maximum deduction is increased to $600 for married individual filling joint returns. For more details click on the link below.
Retirement Accounts Inflation adjustments for 2022
On November 4, 2021, the Internal Revenue Service has come out with the updated 2022 amount ceilings and thresholds for a wide range of qualified retirement plans and accounts. Here are some of the changes: The limitation on deferrals for 401(k) is increased to $20,500 from $19,500 in 2021. The limitation for deferred contribution plans including SEP is increased from $58,000 to $61,000 while limitation for SIMPLE is increase to $14,000 from $13,500 in 2021.The limitation for Traditional and Roth IRAs remains unchanged at $6,000 for 2022. It is important to know that there are also certain income phase outs for making contributions to Roth IRAs. Which means If you are single and make over $129,000 (married filling jointly $204,000) contributions to Roth IRA starts phasing out. For more information, please click on the link below.
Inflation
Have you been grocery shopping recently? The prices have increased drastically since pandemic started. The gas prices have jumped 31.24% according to US Labor and Statistics since January 2020. The inflation over the period of last twelve months is 5.4%. Based on a survey of 1,300 households, Americans expect another 5.4% increase in period of next year. The only things that Americans expect to get cheaper are home prices and medical care. What will happened with economy by the end of this year and in next few years will be interesting to see. Now may be the time for business owners to adjust their prices accordingly so that the bottom line would not suffer.
Interesting Facts
3 Reasons why Business Fail
Here is an interesting video that I came across where in a few minutes is explained why businesses usually fail. Check it out by clicking on a link below.
Let's Talk!
If you know of someone who needs tax and accounting help, please feel free to share with them my contact information. If they are still not sure about making a move please ask them to check out my newsletter.
For free consultation click on the link to schedule a one on one meeting with me over zoom or face to face. Schedule by clicking on a link below
E-mail: dragana@dcmtax.com
Phone:318-751-5455