Page 27 - BusinessWest April 18, 2022
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 Tax Planning
Continued from page 24
contributions are deducted from your income before taxes are figured) and grow your assets. You will need to log in to your plan and adjust your withhold- ings to account for the increase, as the maximum contribution allowed was $19,500 in 2021. Contribution limits are also increasing for Simple IRAs, from $13,500 in 2021 to $14,000 in 2022, with a $3,000 catch-up contribution.
There are some notable changes in the 2022 tax year that may impact how much you will owe when figuring next year’s taxes. On the plus side, the stan- dard deduction will slightly increase for all filing categories. Income thresh- olds for deduction phaseouts will also increase for traditional IRAs and Roth IRAs. In addition, the federal lifetime estate-tax and gift-tax exemption for 2022 jumped from $11.7 million to $12.06 million — $24.12 million for couples if portability is elected when filing after the death of the first spouse. This is more than enough for most Americans.
Unfortunately, the Massachusetts estate tax is not nearly as generous. If you die as a Massachusetts resident,
Audit
Continued from page 25
donations). A best practice would be
to review your funding sources and determine the compliance require- ments needed well ahead of the annual audit. Depending on where your funding is coming from can dictate
the level of compliance requirements you have to adhere to. For example, if you receive federal funding or federal funding passed through the state, this could require additional audit testing to be performed and additional time incurred by the auditor. It’s best to review all funding sources on a regular
Money
Continued from page 26
They obtained insurance through a local broker and invested with a local advisor. As these independent busi- nesses got bought by larger firms, the relationship to the community slowly eroded. Meanwhile, our bank is con- nected to our PayPal account, directly pays our mortgage and car payments, and debits our monthly Netflix sub- scription. The idea of switching banks is enough to cause sleeplessness, even though our relationship manager works at a call center in Tulsa.
As with all trends, opportunities arise. The combination of an intri- cate financial landscape with rapidly changing technology and a greater access to products and solutions than ever before is exciting. Lost in the con- solidation of banking is the local con- nection. In years past, a bigger institu-
your heirs may have to pay an estate tax, which is calculated on the first dol- lar of estates that are over $1 million. Gov. Charlie Baker has current legisla- tion that would exclude the first $2 mil- lion in assets when figuring the estate tax. This change is long overdue.
There are many other changes com- ing this year for taxpayers, and this article highlights just a few. If it impacts you, look up changes to child tax cred- its, earned-income tax credits, deduc- tions for teachers’ expenses, and chang- es to the kiddie tax. Knowledge and planning are the keys to having a suc- cessful, uneventful 2022 tax season. u
Barbara Trombley is a financial advisor and CPA with Wilbraham- based Trombley, CPA; (413) 596-
6992. Securities offered through LPL Financial. Member FINRA/SIPC. Advisory services offered through Trombley Associates, a registered investment advisor and separate entity from LPL Financial. This material
was created for educational and informational purposes only and is not intended as ERISA tax, legal, or investment advice.
basis and communicate any changes with your auditors.
Bottom Line
Once you invest your time and try these best practices, you’ll be able to develop your own processes through- out the year, keep the information organized, and be ready for your next audit. u
Chelsea Russell, CPA is a manager at the Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.
tion had greater access, but that is no longer the case.
In It’s a Wonderful Life, George Bai- ley was the frustrated local banker who single-handedly saved the town from financial ruin. He couldn’t compete with the wealthy industrialist, Henry Potter, who owned half of Bedford Falls. But George had one thing Mr. Potter didn’t, the trust of his neighbors. As financial products and services continue to multiply and digitize at a dizzying pace, it will ultimately be the local trusted banker or advisor who helps confused consumers make the right choices. u
Jeff Liguori is the co-founder and chief Investment officer of Napatree Capital, an investment boutique with offices in Longmeadow as well as Providence and Westerly, R.I.; (401) 437-4730.
  LET OUR TEAM HELP YOUR
Business Thrive in 2022
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Officer | Carla Alves, VP Business Banking | Cindy Korb, Sr. Commercial Loan Administrator | Sarah Yurkunas, Relationship Management Officer
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