401(k) Contribution Limits Increase to $22,500 for 2023, and IRA Limit Rises to $6,500

 

The IRS is raising the bar on retirement savings by increasing the annual contribution limits to 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan.  To the plans just mentioned, participants can look forward to a $22,500 contribution limit for the 2023 tax year, which increased from the previous $20,500 limit (2022 tax year).  Also in 2023, IRA contributions will increase to $6,500, from $6,000 (2022 tax year).

    • Catch-up contributions towards 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increase to $7,500, up from $6,500 in 2022.
    • SIMPLE plans increase to $3,500, up from $3,000 in 2022.

For additional detail on allowed contributions to all retirement plans, please refer to the following IRS press release here.

By |November 9th, 2022|Categories: IRS, Retirement Planning|Comments Off on 401(k) Contribution Limits Increase to $22,500 for 2023, and IRA Limit Rises to $6,500

Inflation Reduction Act of 2022: Clean Vehicle Energy Credit

 

With the recent passing of the Inflation Reduction Act, you can reap the benefit of a $7,500 tax credit on purchasing a new electric vehicle. The new law also includes guidance on purchasing used electric vehicles, which are eligible for a credit for the lesser of $4,000 or 30% of the sales price. To qualify for this credit, there are adjusted gross income limitations as below.

Single – $150,000

Married filing joint – $300,000

Head of household – $225,000

To be eligible under the Inflation Reduction Act, the qualifying vehicle must be purchased after August 16, 2022. Visit this link to see if your new vehicle is eligible – https://afdc.energy.gov/laws/inflation-reduction-act.  If you were in a binding contract to purchase a qualifying clean vehicle and did not take possession of the vehicle until after […]

By |October 4th, 2022|Categories: BCo Community News, Individual Tax, IRS|Comments Off on Inflation Reduction Act of 2022: Clean Vehicle Energy Credit

IRS Announces Interest Rate Increases for the Fourth Quarter of 2022

 

Beginning October 1, 2022, individual taxpayers can expect to see a 1% increase in interest rates for tax over and underpayments (taxes owed that are not fully paid).

This 6% rate is an increase from the previously established 5% (July 1, 2022) and the interest will be compounded daily.  Individuals are not the only taxpayers that will be seeing the hike; corporate taxpayers with an overpayment exceeding $10,000 will be assigned a 3.5% rate, or 5% if the overpayment is below this threshold.   For underpayments on the corporate side, an 8% rate will be assigned.

For more information on the new interest rates for the fourth quarter, please click here.

By |September 28th, 2022|Categories: Announcements, IRS|Comments Off on IRS Announces Interest Rate Increases for the Fourth Quarter of 2022

IRS Provides Broad Penalty Relief For Some 2019 and 2020 Returns

 

The IRS on August 23, 2022, announced it will grant automatic penalty relief for late-file penalties imposed with respect to certain returns required to be filed for the 2019 and 2020 tax years.

Notice 2022-36 provides systemic penalty relief to taxpayers for certain civil penalties related to 2019 and 2020 returns. Penalty relief is automatic so eligible taxpayers need not apply for it. If penalties have already been paid, the taxpayer will receive a credit or refund. However, the IRS has not yet announced if or when it will notify eligible taxpayers that it has waived their preexisting penalties pursuant to this announcement.

However, it is critical to note that some of these automatic penalty waivers are available only if a taxpayer files its delinquent returns on or before September 30, […]

By |August 29th, 2022|Categories: BCo Community News|Comments Off on IRS Provides Broad Penalty Relief For Some 2019 and 2020 Returns

Inflation Reduction Act Becomes Law

 

President Biden signed the Inflation Reduction Act into law at a White House ceremony on August 16, finalizing legislation intended to address inflation by paying down the national debt, lower consumer energy costs, provide incentives for the production of clean energy and reduce healthcare costs.

The bill moved through the legislative process in near-record time, having been first introduced by Sens. Chuck Schumer (D-NY) and Joe Manchin (D-WV) on July 27.  With the 50-50 Senate, summer recess, and approaching mid-term elections, the path to passage by both houses of Congress was not a certainty.

The act is expected to raise roughly $450 billion through new tax provisions, including a 15% minimum book tax on certain large corporations, a 1% excise tax on corporate stock buybacks, and a two-year extension of section 461(l) […]

By |August 22nd, 2022|Categories: BCo Community News|Comments Off on Inflation Reduction Act Becomes Law
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