Happy New Year!
As you start your financial planning for 2022 and beyond, keep in mind these updated changes for 2022:
Estate & Gift Taxes for 2022: The estate and gift tax exemption amount increased this year from $11.7 million to $12.06 million per individual. The top gift, estate, and GST tax rate is unchanged from2021 at 40%. And, the annual gift tax exclusion amount increases in 2022 to $16,000 per recipient.
Retirement Plan Contribution Limits for 2022:
Plan Type Age Limit 2022 Contribution Limit
IRA (Traditional & Roth) Up to Age 50 $ 6,000
IRA (Traditional & Roth) Age 50+ $ 7,000
Salary Deferrals (401k, 403b, 457) Up to Age 50 $ 20,500
Salary Deferrals (401k, 403b, 457) Age 50+ $ 27,000
Simple IRA Up to Age 50 $ 14,000
Simple IRA Age 50+ $ 17,000
Defined Contribution Plans $ 61,000
(SEP/IRA, Profit Sharing, Money Purchase, i401k)
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The deduction phaseout for regular IRAs in 2022 is the following:
- Joint filers in company plans: Phaseout starts at $109,000 of Annual Gross Income (AGI) and ends at $129,000.
- If only one spouse is covered by a company plan: Phaseout starts for the spouse who isn’t participating at $204,000 of AGI and ends at $214,000.
- For single filers who are also participating in the company plan: Phaseout starts at $68,000 of AGI and ends at $78,000.
The phaseout for Roth IRAs in 2022 is the following:
- The Roth income limits for joint filers: Annual Gross Income (AGI) of $204,000 to $214,000.
- The Roth income limits for singles: AGI of $129,000 to $144,000.
* Please note that you should consult with your accountant prior to funding any retirement plan to verify your income eligibility and what plan would be most suitable for you.
