Today I’m sharing what the recent spike in inflation might do to your tax bill.
Why?
Because the higher inflation is, the more uneven its impact is on taxes owed by retirement savers.
And nobody likes it when Uncle Sam catches them off guard!
If you want to know the 6 ways inflation might impact your taxes this year, you’re going to love this episode.
Key Takeaways
- The mortgage interest deduction cap remains unchanged at $750,000, resulting in higher tax bills for those with housing debt above the cap.
- Real estate has skyrocketed but the capital gains exemption remains unchanged. If sell your home this year, you might have a higher tax bill.
- The 3.8% surcharge on investment income remains unadjusted for inflation, resulting in higher tax bills for high earners.
- Working professionals will likely see a bump in pay this year because the inflation factor used to adjust federal tax withholding tables has increased 3% in 2022.
- Those contributing to 401k’s can save 5% more to their tax-advantaged retirement accounts this year.
- Social Security recipients received a nice bump this year. Since the income thresholds aren’t inflation-adjusted, a greater percentage of those payments will be taxable.
How to Listen to Today’s Episode
Episode Links & Resources:
- 👉 Get Your One-Time Retirement Plan
- Inflation Part 1: Five Things Retirement Savers Need to Know
- Consumer Price Index Updated Report [U.S. Department of Labor]
- Inflation Surges 7.5% as of January 2022 [CNBC]
