Tag Archives: tax

New 2023 Contribution Limits, 401k, IRA, Roth, SEP

Once again not surprising with the afore mentioned COLA adjustment on Social Security…. Retirement contribution limits were also adjusted by a large amount….

We find ourselves reviewing this amount so frequently and getting confused as the calendar turns as well as being in the next tax year but making contributions for the prior…. we are going to have a special tab here on our blog moving forward that will have two years data. The IRS Release.

So here we go!

Retirement Contribution Limits

  • 401(k), 403(b), most 457 plans, increased to $22,500 (2023), up from $20,500 (2022)
  • Catch up for those over 50 is increased to $7,500 (2023), up from $6,500 (2022)
  • Total max 401(k), 403(b), most 457 plans including catch up is $30,000 (2023) up from $27,000 (2022)
  • limit on annual contributions to an IRA increased to $6,500 (2023), up from $6,000 (2022)
  • IRA catch up for those age 50 and greater remains $1000
  • Annual Gift Exclusion amount increased to $17,000 (2023) from $16,000 (2022)

This takes care of the great majority of retirement plans…but for the record we do not like the formatting and will wait to post the new page once a more comprehensive and better formatted list is completed….

Have a “Fresh of the Presses IRS Retirement Increased Limit” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Great Time of the Year to Check Run Rate of Contributions to Retirement Plans or the Like

With a pending holiday week coming up in the next several and as mentioned before many on Wall Street seem to be getting their kids back to school. We thought it a timely time to remind everyone to check those retirement contribution run rates….


Great time to review your contribution levels

Midway through the third-quarter, is a good time for all of us to review our retirement contribution levels. If our intent is to max out your 401(k), or other retirement plan, take a peek and see if you’re on track to achieve this goal.



If you have any questions certainly shoot us your latest paycheck and we can do the calculations, but here are roughly where we should be on our contributions to the regular and ketchup 401(k) levels.


Ideally your year to date (YTD) contribution levels for your 401(k) regular withholding by yourself should be about $13,500 in order to meet the $20,500 regular filing maximum by the end of the year and if our goal is to achieve the $27K catchup for those 50 and older we should be at about the $18,000 level today. Both of these should be our individual YTD withholding amounts. We know there are matching and employer contributions … but the rules are set for us as an individual at the $19,500 regular maximum and $27,000 catch-up maximum.

Two quick reminders… if you have changed employers it is our job to keep up with the maximum amounts as mentioned here because our new employer will not know our prior contributions… Lastly we like to max fund early our contributions if we know we are not going to be at our employer the full year…. Especially if we may be going to another place that may not have a plan or may have a mandatory waiting period..

There are variances in certain situations, most of which we have already discussed, but those that we have not recently …

  This is your friendly reminder!

Have a Great “Retirement Run Rate” Reminder Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Taxes are Done… Well at least most… Spring is here, Mosquito Bite Proves… Friday

Monday after a long holiday weekend made for the final day of the regular form 1040 Tax filing day… yay

Extenders, which there are many, we will wrap up those as the needed documents arrive, but for the most part all the hard work is complete.

As mentioned earlier, we like the firm date of filing, but it does make for extraordinary busy days… all good of course…

Speaking of taxes, for those that have not, we always like a copy for our records for review and safe keeping… amazing how many threads of light our tax return will shed if needed… Thanks to all of those who have already shared a copy!!

Spring has Sprung

Usually the faithful tree out back makes for a good Spring has Sprung alert…. this year with the holiday and late spring, it came and went before we could make note here…. BUT the mosquito bite is a sure, but much less pleasurable sign Spring has Sprung….

Ahhhhh, but today is a Friday on a Spring has Sprung Weekend… Enjoy and talk next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Tax Season notes from the field, Be Careful what you ask for, Missing Basis, Automatic Transaction Downloads Great … Automatic Transactions Downloads Not Great, Macro Theme for 2021 Returns …

For the past several years … as we all know, tax season was delayed for various reasons, with exceptional confusion last year due to various filing dates depending on your geographic location.  As we finished those seasons, which due to the delays were very long, we wished for our tried and true middle of April due date.

In truly be careful what you ask for form, it has been … to say the least … hectic this year!  We will get through this together (and except for those extension filers) on the other side of middle/April we will have the great majority of the yearly tax filings completed! Yay

Tax Seasons Findings

Each tax season seems to have its own theme or spirit so to say, and this one is no different!

We are finding an abnormally large amount of missing basis on transactions … especially any unusual transaction. Please double check to make sure your bases is included on your return, just because there’s zero marked on the tax form it’s highly likely you have a basis and it was just not reported. We have seen numerous zero basis reporting by one of the very largest firms that specializes in stock options this year. Don’t miss a basis as this is a mistake to our own disadvantage that the IRS would not catch! Yikes

We are neutral on the automatic download from your financial company to import transactions,. We completely understand it’s a hassle especially for those that are doing it themselves to download all of the transactions, that being said, the automatic downloads are sometimes working perfectly and other times not at all. Similar to your missing bases from before above, check those transactions to make sure they’re in the correct spot of your return…. i.e. Long term or short term

From a very high level we are broadly seeing more taxes due across-the-board than in prior years for various reasons.  Not to be a downer but just to set everyone’s expectations as we get closer to completion, there may be extra taxes due!

Be sure to reach out if you have any questions or concerns and we urge you if you have not started your taxes or delivered your information to your tax professional, do so now as the aforementioned normal deadline has everyone shell shocked as we return to the normal super busy season.

Have a Great “Tax Season Spirit Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

IRS Tax Return Backlog Update… Interesting Productive Technology for Home Internet Repair … Brrrr a Cold Friday Here in the South …

During last year’s extended Tax Return season it was discovered that for various reasons the IRS was greatly backlogged in completing returns. Given that some 2/3 or more tax returns have refunds one can imagine the disappointment in a delayed return of one’s hard earned work.

At the time it was believed there were about 26 million tax returns that were behind … we even wrote about it here, this recent Washington Post article gave updated numbers just as of late that the IRS is some 24 million tax returns behind STILL ! Yikes…

Given this fact with a small sample size of folks that have filed their returns already it has been about a two week turn around for electronically filed returns to get their refund.

We will keep you posted on this but for those of us that are getting a refund we will watch closely on the corrected 1099’s and may error in allowing everyone to file their returns sooner rather than later so as not to get into the great delay!

Interesting Technology Discovered During Internet Repair

Those of you with good memories may recall that last week before the long weekend the Casa was without Internet.

Similar Technology

Upon return to the home from being out of town over the weekend the Internet was still absent. An hour and a half later the repair was complete and the most interesting discovery of technology occurred. During the call the technician rather than scheduling someone to come out to the house in a day, a week, or two weeks, he asked me to download a quick app on my cell phone click on a text that he sent … turn on my camera and my phone became a live lens back to the technician.

Yes 90 minutes is a long time to be on the phone with a technician … not unexpectedly, but what a terrific quick repair was made especially given the nasty weather we have had here in the South this week!

Sure love that technology when it works, not so much when it doesn’t!

Ahhhhhh today is a Friday, and you guessed it, the wireless Mic was in action again and a failure of keeping this post short was again the result!

Will try to do better, enjoy your weekend, talk next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

ESTIMATED Dates of Tax Documents … Friday

While it only seems like yesterday that we finished last years (2020) tax returns, that light at the end of the tunnel is an oncoming 2021 due date….

As such, here are some of the delivery dates of tax forms.

Timing of Available Tax Documentation

  • Delivery of 1099s: Currently, we expect the first wave of 1099s to begin posting online on January 21, 2022 with Advisor and client notifications going out shortly after. Estimated dates for the waves are below:
 Target Delivery Date*Details
Wave 1Close of business January 21, 2022No holdings subject to reallocation (ex. RICs, REITs)
Wave 2Close of business February 4, 2022Low risk for reallocation; income reallocations finalized through January 29th
Wave 3Close of business February 11, 2022Clients with finalized income reallocations received from January 30th through February 3rd
Wave 4Close of business February 11, 2022Remaining clients
  • Correction Cycles - Begins March 3, 2022 and occurring every 2 weeks through April 14, 2022

There were a few questions this week on these, hence the heavy on a …….. FRIDAY!

Have a Great Day and a Great Weekend… stay warm if you are in our neighborhood, IF YOU CAN… talk next week!

John A. Kvale CFA, CFP

  • Founder of J.K. Financial, Inc.
  • A Dallas Texas based fee only
  • Financial Planning Total Wealth
  • Management firm.
  • jkfinancialinc
  • street-cents

New Uniform Life Tables Gives RMD’s a Slight Break … You are a Few Years Younger in the IRS’s Opinion! YAY

As the calendar turned to 2022, those that are requited to take RMD’s (Required Minimum Distributions) from their IRA and or other qualified taxable accounts, became a few years younger in the eyes of the IRS! YAY !

New Uniform Table Makes You Younger

If you did not feel younger after the turn of the calendar to 2022, don’t feel bad, the IRS sees you as younger … maybe living 10% longer….

What Happened?

The IRS updated their mortality tables as can be seen HERE in this terribly formatted release:

III. Updated Life Expectancy and Distribution Period Tables

The life expectancy and distribution period tables in these regulations have been developed based on mortality rates for 2022. These mortality rates were derived by applying mortality improvement through 2022 to the mortality rates from the experience tables used to develop the 2012 Individual Annuity Mortality Basic Tables (which are the most recent individual annuity mortality tables). As was the case in the proposed regulations, the separate mortality rates for males and females in these experience tables, which were based on the 2000-2004 Payout Annuity Mortality Experience Study,[11have been projected from the central year of 2002 using the respective mortality improvement rates from the Mortality Improvement Scale MP-2018 for males and females.[12The mortality table in these regulations was developed by blending the resulting separate mortality rates for males and females using a fixed 50 percent male/50 percent female blend.

What does it mean?

All other things being relatively equal, you will not have to take as much out/(pay taxes on) the distributions of our qualified account, because the amount may be less … YAY … thereby making you younger in the eyes of the IRS, because we are all living longer!

So we are younger, don’t have to take as much of and RMD, which means less taxes? Yep… sign me up!

Have a Great ‘Living Longer, Less Taxes” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

ES Payments for Q4 of 2021 Due On Tuesday January 18th Day AFTER Bank/Market Holiday

Happy Friday …. We made it safely to the end of the first full week of the new year! yay

Early this week the following email from the IRS hit our inbox in timely form, so we wanted to share!

Issue Number:    IR-2022-03

Inside This Issue


IRS reminder to many: Make final 2021 quarterly tax payment by Jan. 18; avoid surprise tax bill, possible penalty
 

WASHINGTON − The IRS urges taxpayers to check into their options to avoid being subject to estimated tax penalties, which apply when someone underpays their taxes. Taxpayers who paid too little tax during 2021 can still avoid a surprise tax-time bill and possible penalty by making a quarterly estimated tax payment now, directly to the Internal Revenue Service. The deadline for making a payment for the fourth quarter of 2021 is Tuesday, Jan. 18, 2022.

The hotlink from the IRS email is hot and will take you to the IRS website for electronic payment, which we HIGHLY suggest you use.

Between snail mail slowness and the tremendous IRS back logs, sending a check in the mail may lead to a very delayed payment an even a loss of payment which the IRS would frown upon.

Have a Great “ES Friday Reminder” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents


401k Plans Year 2022 Limits ($20,500 + $6,500 Catch Up), IRA Stay Same ($6,000 + $1,000 Catch Up) … Hmmm?

Great News for corporate and similar retirement plans as we get a 5% (actually 5.13%) bump in contribution limits…yay

Not sure what happened to the cost of living adjustments (COLA) for regular IRA’s, Roth’s and our catch up provisions as they are stuck once again at the same levels? Maybe they are only going to increase them every four years which puts an increase next year? Maybe they (IRS) does not want to confuse us? Either way, here are the updated rules from the IRS latest release for year 2022 !

The following from this IRS.GOV announcement and hot links are live back to the IRS website if you have deeper questions on each subject!

Deferral limits for 401(k) plans 

The limit on employee elective deferrals (for traditional and safe harbor plans) is:

  • $20,500 in 2022 ($19,500 in 2021 and 2020; and $19,000 in 2019), subject to cost-of-living adjustments

Catch-up contributions for those age 50 and over

If permitted by the 401(k) plan, participants age 50 or over at the end of the calendar year can also make catch-up contributions. You may contribute additional elective salary deferrals of:

  • $6,500 in 2022, 2021 and 2020 and $6,000 in 2019 – 2015 to traditional and safe harbor 401(k) plans

Deferral limits for IRA Roth 

For 2022, 2021, 2020 and 2019, the total contributions you make each year to all of your traditional IRAs  and Roth IRAs can’t be more than:

  • $6,000 ($7,000 if you’re age 50 or older), or
  • If less, your taxable compensation for the year

Traditional IRAs

  • Retirement plan at work: Your deduction may be limited if you (or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels.
  • No retirement plan at work: Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.

These charts show the income range in which your deduction may be disallowed if you or your spouse participates in a retirement plan at work:

2022

2021

Roth IRAs

This table shows whether your contribution to a Roth IRA is affected by the amount of your modified AGI as computed for Roth IRA purpose.

If your filing status is…And your modified AGI is…Then you can contribute…
married filing jointly or qualifying widow(er)< $204,000up to the limit
singlehead of household, or married filing separately and you did not live with your spouse at any time during the year< $129,000up to the limit

Have a Great “Year 2022 Retirement Limits Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

New Tax Laws … We are Reviewing … Friday

Did not want to scare you with the title of this post…. after all it is a Friday!

The initial new tax proposals have finally been released and we are on them…but not too deep as of yet!

For the record the initial proposal is not too terribly strict …. Certainly not near as strong as some of the headlines you may have seen!

Keep in mind, these are PROPOSALS and will be different once in law….. but we like to get a jump start on things for planning purposes… but NOT take actions until set in stone/law….

Friday

With a big week of posts, we will let you off easy … No Promises for next week!

Be good, be well, be safe, and Enjoy your Weekend and Friday!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents