2022 Tax Summary: A tool for your practice
WealthVest has released their updated 2022 Tax Summary as a reference of all the IRS information financial professionals and their clients need to have a successful tax year. Included for both 2021 and 2022 is – Standard Deduction amounts, Phase-out income limits, Social Security Info, Social Security COLA Adjustments, Uniform Lifetime and Life Expectancy tables, Retirement Contribution limits and income phase outs, tax credit info and marginal tax rates.
One major change is this year’s Social Security cost-of-living adjustment rate is 5.90% compared to 1.30% in 2021. This is the largest jump since 2008, when it jumped 5.8%. Roth IRA. IRA contribution limits, and catch-up contributions remain the same as 2021.
Contributions into Health Savings Accounts or HSA increased from $3,600/$7,200 for individuals and families, to $3,650/$7,300.
For required minimum distributions (RMDs) the IRS has issued the following guidance:
You cannot keep retirement funds in your account indefinitely. You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 70½. However, changes were made by the SECURE Act. Due to changes made by the SECURE Act, if your 70th birthday is July 1, 2019 or later, you do not have to take withdrawals until you reach age 72. Roth IRAs do not require withdrawals until after the death of the owner.
• Your required minimum distribution is the minimum amount you must withdraw from your account each year.
• You can withdraw more than the minimum required amount.
• Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts).
Calculating the required minimum distribution
The required minimum distribution for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS’s “Uniform Lifetime Table.” A separate table is used if the sole beneficiary is the owner’s spouse who is ten or more years younger than the owner.
Beginning date for your first required minimum distribution
• IRAs (including SEP and SIMPLE IRAs)
› *April 1 of the year following the calendar year in which you reach age 70½, if you were born before July 1, 1949.
*April 1 of the year following the calendar year in which you reach age 72, if you were born after Jun 30, 1949.
• 401(k), profit-sharing, 403(b), or other defined contribution plan
*Generally, April 1 following the later of the calendar year in which you: reach age 72 (age 70½ if born before July
1, 1949), or retire (if your plan allows this). Consequence for failing to take required minimum distributions
If you do not take any distributions, or if the distributions are not large enough, you may have to pay
50% excise tax on the amount not distributed as required.
• To report the excise tax, you may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and
Other Tax-Favored Accounts.
• See the Form 5329 instructions for additional information about this tax.
The 2022 Tax Summary can be downloaded here. WealthVest is a leader in providing financial professionals, and their clients, the tools required for a long and secure retirement. Call us at (877) 595-9325 to learn more about the tools and resources available now to financial professionals.
The 2022 Tax Summary provides general information on the 2022 tax structure and is deemed reliable at the time of print in December 2021. The 2022 Tax Summary is not designed or intended to provide specific legal or tax advice and should not be used to promote, market, or recommend any tax strategy. WealthVest and WealthVest employees and agents do not provide tax or legal advice. Individuals are encouraged to consult a tax advisor or attorney.