Highlights: The 401(k) deferral limit increased to $20,500. The FICA taxable wage base increased to $147,000. The maximum plan compensation limit increased to $305,000 and the maximum annual addition increased to $61,000. Indexed Plan Limits 2022 2021 Deferral Limits 401(k) Plan or SAR-SEP $20,500 $19,500 403(b) Plan or 457 Plan 20,500 [...]
Under current tax law, individual taxpayers are not permitted to deduct casualty losses from catastrophic events like Hurricane Ida, wildfires and floods…right? Wrong. Although recent legislation has tightened the rules, you may still claim deductions, within certain limits, for losses incurred in a federally designated disaster area. Following are the answers to some frequently [...]
The IRS has announced the depreciation limits for vehicles placed in service in 2021. For instance, the maximum first-year deduction for a passenger car, including “bonus depreciation,” is $18,200 (up from $18,100 for cars placed in service in 2020). Deductions are then based on the percentage attributable to business use. Note: Comparable rules apply to [...]
Generally, it takes a long time—39 years to be exact—to fully recover the cost of a business building through regular depreciation deductions. However, your business may benefit from faster write-offs if it conducts a “cost segregation study.” In effect, the study breaks out certain building components so the costs can be deducted over a shorter [...]
A SERP may sound like a creature from a science fiction movie, but it is actually a popular retirement savings vehicle for the top brass. Typically, the SERP—an acronym for Supplemental Executive Retirement Plan—is used to complement a 401(k) or other qualified plan. It offers generous benefits to a chosen few and enables an employer [...]
Do you pay someone to watch your young kids while you (and your spouse, if you are married) work during the day? You may be entitled to a dependent care credit that can offset your personal tax bill on a dollar-for-dollar basis. Even better: Thanks to the new American Rescue Plan Act (ARPA), the [...]
If you are starting up a new business venture as the pandemic abates, or buying an existing business, you may have to answer this question: When is the operation officially opening for business? This may be significant from a tax perspective. Reason: While “ordinary and necessary” business expenses are generally deductible, start-up expenses must be [...]
Housing prices have been skyrocketing in many parts of the country. If you buy a home, at least you may qualify for generous mortgage interest deductions, as can many existing homeowners. Despite revised rules imposed by the Tax Cuts and Jobs Act (TCJA) for 2018 through 2025, you can generally continue to write off most, [...]
The U.S. Department of Agriculture (USDA) is providing up to $200 million to provide relief to timber harvesting and timber hauling businesses that have experienced losses due to COVID-19 as part of USDA’s Pandemic Assistance for Producers initiative. Loggers and truckers can apply for assistance through USDA’s Farm Service Agency (FSA) July 22 through Oct. 15, [...]
This spring, two Senate proposals were introduced that contain significant changes to federal estate, gift, generation-skipping transfer (GST) taxes, and, the concept of "stepped-up basis" for inherited and gifted wealth. It should be emphasized here that these are just proposals and it is unknown what, if any, of these acts will become law. The two [...]