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IRS announces changes to retirement plans for 2022
Next year taxpayers can put an extra $1,000 into their 401(k) plans. The IRS recently announced that the 2022 contribution limit for 401(k) plans will increase to $20,500. The agency also announced cost of living adjustments that may affect pension plan and other retirement-related savings next year.
Highlights of changes for 2022
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $20,500. Limits on contributions to traditional and Roth IRAs remains unchanged at $6,000.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If neither the taxpayer nor their spouse is covered by a retirement plan at work, their full contribution to a traditional IRA is deductible. If the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced or phased out until it is eliminated. The amount of the deduction depends on the taxpayer's filing status and their income.
Traditional IRA income phase-out ranges for 2022 are:
• $68,000 to $78,000 - Single taxpayers covered by a workplace retirement plan
• $109,000 to $129,000 - Married couples filing jointly. This applies when the spouse making the IRA contribution is covered by a workplace retirement plan.
• $204,000 to $214,000 - A taxpayer not covered by a workplace retirement plan married to someone who's covered.
• $0 to $10,000 – Married filing a separate return. This applies to taxpayers covered by a workplace retirement plan
Roth IRA contributions income phase-out ranges for 2022 are:
• $129,000 to $144,000 - Single taxpayers and heads of household
• $204,000 to $214,000 - Married, filing jointly
• $0 to $10,000 - Married, filing separately
Saver’s Credit income phase-out ranges for 2022 are:
• $41,000 to $68,000 – Married, filing jointly.
• $30,750 to $51,000 – Head of household.
• $20,500 to $34,000 – Singles and married individuals filing separately.
The amount individuals can contribute to SIMPLE retirement accounts also increases to $14,000 in 2022.
More information:
Notice 2021-61
Roth IRAs
Traditional IRAs
Traditional and Roth IRAs — A comparison chart
Publication 590-A, Contributions to Individual Retirement Arrangements
COLA Increases for Dollar Limitations on Benefits and Contributions

SBA streamlines forgiveness process for most PPP loans The SBA issued new guidance intended to speed up and simplify the forgiveness process for Paycheck Protection Program loans of $150,000 or less, which represent 93% of the outstanding loans in the $800 billion program.

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100% Business Deduction for Restaurant Food & Beverage in 2021 – Did You Know?

A special tax rule may enable many businesses, including sole proprietors and independent contractors, to take larger meal expense deductions in 2021 than the IRS usually allows. Ordinarily, deductions for food and beverage costs cannot exceed 50% of the actual expense. However, the 2021 rule enables businesses to deduct 100% of the cost of food and beverages from restaurants in certain cases beginning January 1, 2021 through December 31, 2022.

The provision defines a restaurant as a business that prepares food or beverages for retail customers to consume on-site, pick up, or receive by delivery. This definition excludes most grocery and convenience stores, unless the store contains a separate restaurant or cafe area. In addition, facilities overseen or owned by the employer claiming the deduction, such as a workplace cafeteria, generally do not qualify as restaurants under this rule.

In order for meal expenses to qualify for this special deduction, the following conditions must be met:

- The business owner or an authorized employee is present when the food and/or beverages are provided.
- The expense is paid to a restaurant, based on the definition above.
- The food and beverage costs are not lavish or extravagant for the circumstances.

The activity must also meet all the standard criteria for business meal deductions. A business tax advisor can help you determine whether your food and beverage expenses comply with IRS rules, and whether they qualify for a 100% deduction in 2021.

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