Get Ready for April 18th,2022
Retirement Credits
The contributions you make to a retirement plan such as a 401(k) plan or traditional or Roth IRA gives you a tax credit of 50%, 20% or 10%, depending on your adjusted gross income that you report on Form 1040. Any rollover contributions do not qualify for the credit. For 2022, you can put up to $20,500 in a traditional 401(k), up $1,000 from 2021. The 50-and-over crowd is allowed an extra $6,500 as a “catch-up” contribution, for a total of $27,000. Employer contributions do not count toward these limits. The maximum contribution amount that qualifies for the credit is $2,000 ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly). The IRS has a chart to help you calculate your credit. Selecting the proper savings vehicle in times of inflation is of critical importance. You still have until April 18th to make your IRA, Roth, or SEP contributions.
The contributions you make to a retirement plan such as a 401(k) plan or traditional or Roth IRA gives you a tax credit of 50%, 20% or 10%, depending on your adjusted gross income that you report on Form 1040. Any rollover contributions do not qualify for the credit. For 2022, you can put up to $20,500 in a traditional 401(k), up $1,000 from 2021. The 50-and-over crowd is allowed an extra $6,500 as a “catch-up” contribution, for a total of $27,000. Employer contributions do not count toward these limits. The maximum contribution amount that qualifies for the credit is $2,000 ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly). The IRS has a chart to help you calculate your credit. Selecting the proper savings vehicle in times of inflation is of critical importance. You still have until April 18th to make your IRA, Roth, or SEP contributions.
Self-Employed Health Care Premiums
If you’re self-employed, you can deduct 100% of the health insurance premiums that you pay monthly for yourself, your spouse and your dependents whether or not you itemize deductions. If you have kids under 27 at the end of 2021, you can also deduct their premiums—even if they aren’t dependents. However, you can’t claim this deduction if you’re eligible to participate in a subsidized health plan from an employer of either you, your spouse, dependents, or kids under 27.
If you’re self-employed, you can deduct 100% of the health insurance premiums that you pay monthly for yourself, your spouse and your dependents whether or not you itemize deductions. If you have kids under 27 at the end of 2021, you can also deduct their premiums—even if they aren’t dependents. However, you can’t claim this deduction if you’re eligible to participate in a subsidized health plan from an employer of either you, your spouse, dependents, or kids under 27.
Medical Expenses
For 2021, you can deduct 16 cents a mile for medical purposes such as driving to doctors’ or hospital appointments. If you file Form 1040, you can only deduct the amount of your medical and dental expenses that are more than 7.5% of your AGI. The expenses must have been paid in 2021, unless they were charged to a credit card (in which case you can deduct the expense in the year you charged the card, and not necessarily the year in which you repaid it).
For 2021, you can deduct 16 cents a mile for medical purposes such as driving to doctors’ or hospital appointments. If you file Form 1040, you can only deduct the amount of your medical and dental expenses that are more than 7.5% of your AGI. The expenses must have been paid in 2021, unless they were charged to a credit card (in which case you can deduct the expense in the year you charged the card, and not necessarily the year in which you repaid it).