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The Standard Deduction For 2022

Finishing Well / Hans Scheil
The Truth Network Radio
April 30, 2022 8:30 am

The Standard Deduction For 2022

Finishing Well / Hans Scheil

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April 30, 2022 8:30 am

Hans and Robby are back again this week with a brand new episode! This week's show is about taxes. Hans and Robby has you covered when it comes to information and tips on the standard deduction for 2022.

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on for free!

You can contact Hans and Cardinal by emailing or calling 919-535-8261. Learn more at  Find us on YouTube: Cardinal Advisors.


This is Rodney from the Masculine Journey Podcast, where we explored manhood within Jesus Christ. Your chosen Truth Network Podcast is starting in just a few seconds.

Sit back, enjoy it, share it, but most of all, thank you for listening and choosing the Truth Podcast Network. Now, let's get started with Finishing Well. Finishing Well is a general discussion and education of the issues facing retirees., Cardinal Advisors, and Hahn-Shile CFP sell insurance. This show does not offer investment products or investment advice. Well, welcome to Finishing Well with certified financial planner Hahn-Shile and today's show is the standard deduction for 2022.

And not to be confused with, you know, with the taxes that you probably just filed for 2021, we're talking about the standard deduction for the year that we're currently in, which I think you're going to find this show to be enlightening. And that's why I want to start off with this idea of the childlike spirit. You might remember Jesus in the chapter 18 of Matthew, you know, asked the child to come to him and said that, you know, if you accept the kingdom of God like one of these, you know, this is the idea of that childlike spirit. Well, there's a wonderful story that I heard recently that just illustrates this so beautifully because children have questions and they don't go into a lot of stuff assuming they know a lot of stuff.

So that childlike spirit has everything to do with why, you know, we listen to shows like finishing well, and we try to learn how to be good stewards of the things that God has given us, especially our taxes and those kinds of things that we're going to talk about today. But there was this little boy and he was standing on the beach and there was this big aircraft carrier that was kind of off in the distance. And the little boy was standing on the sand and he's just waving like crazy to this aircraft carrier. And as the older man comes up and looks at him, said, son, what are you doing? And he said, oh, I'm waving to the aircraft carrier so that when it comes close, you know, the captain will come down and wave to me. And the man said, son, that captain's a very busy man. He doesn't see you waving over here and he's not going to come down off the bridge to wave to you. And he goes, oh yeah, he will. He goes, well, what makes you so sure of that? And he said, well, it's my dad. The point of that is that, oh yeah, I mean, the father is your father and he is, he's certainly flying something a lot bigger than an aircraft carrier, but he's more than willing to come down and wave to us if we have ears to hear and eyes to see.

And so I really, I really love this topic because there's so much here that we can learn about, you know, what's new. This is 2022. It's a new year and the new standard deduction is here, right Hans?

Correct. And these things are indexed for inflation every year. The real point I want to make is that many people that come in to see me, they didn't get the memo back in 2018 that we've now got this big standard deduction. And so we don't have to keep track of a lot of stuff anymore. Were you aware of that until you kind of learned it from me?

I actually was. I'm doing my own taxes and so, but I learned about the standard deduction, but I didn't realize all the ramifications until I started doing shows with you. That's for sure.

Yeah. And so you've got for a married couple filing jointly, we're both 65 and over. The number is $28,700 of standard deduction. And for a married couple under 65, we're both or under 65, it's $25,900. And for single people, a single person 65 and over is $14,250. And for people under 65, it's $12,950. So I'm just telling you, most people, maybe they're kind of aware of it, but they really need to think of the implications of this, even if they're aware, period, that this number used to be like four or five thousand dollars.

Right. And now it's $28,700. And it was really the Tax Reform Act, the Tax Cuts and Jobs Act of 2017. And their goal, if you'll remember, was to be able to simplify taxes and make you be able to do them on a postcard. And, you know, you can just fill it out on a postcard and send it in. You know, how's that working for you?

They didn't quite meet their goal, but they did do something really pretty wonderful from a standpoint of, wow, the record keeping is so much easier than what we used to have to do. Well, yeah, but again, most people didn't get the memo. I mean, I just have clients that, you know, I don't actually do their taxes for them because I don't do that as part of my practice.

And neither does Tom. But we have a CPA that is affiliated with us and he does a lot of taxes for a lot of our clients. And so I have a number of older clients that I still get the stuff from them, but you can just email it to me now.

But they want me to come over and they hand me a whole box of stuff. And, you know, they got medical receipts, they got all the interest they paid. I do need interest they received, like from the bank or those kind of 1099s. But it's just real clear that a lot of people are still keeping track of all the deductions, all the charitable contributions. You know, we're 20 bucks here, 10 bucks here, 50 dollars a week into the church. And, you know, it makes sense. They've done this their whole life, so they keep track of all of it. And boy, I'm getting a tax deduction. I think they still are holding on to the belief that they're getting a tax deduction for either their contributions or interest they're paying.

And I guess in some ways they are. It's just they don't need to keep track of it for the tax person. And they're getting $28,700 if they're a married couple over 65. So I wanted to make that point. And what I wanted to make the point on is that prior to the tax reform, when you were itemizing things, what were the main things that you were itemizing on your tax return?

So, and, you know, I'm just going to go ahead and list those. I mean, for most people, they have a home mortgage. Now, a lot of retired people have their mortgage paid off. They've paid for it, and they live in their mortgage free.

But people under 65, both, I have a home mortgage. And so the interest on that mortgage has been deductible since I was a baby. And it's still deductible.

But that's a number that's included in the $28,700. So I don't file a, I don't itemize my deductions. I just take the standard deduction like everyone else.

So even though I got a pretty big mortgage, my mortgage is like $380,000 on my house, and the interest rate's like 3%. So I have like $10,000. Well, so I could take that $10,000 off my taxes, but I still am nowhere near $28,700.

And then charitable contributions, so I give generously. But, you know, you add all that up, and it's probably like $8,000 over the course of the year. So now we're up to $18,000. And then I can write off my state and local taxes up to $10,000.

But they're about another $6,000 for me. So the time I add up all the deductions, I'm at like $24,000. So the government really didn't give me anything other than the fact that they said, you know, you don't really need to keep track of this anymore. I mean, you can, you know, we're just going to let you write this number down on your tax return, and you can forget all the receipts. Make sense?

No, man. Yeah, it makes all kinds of sense. Because all that stuff, you know, is like trying to hunt up, you know, what you paid on your state taxes and all that stuff. It all takes time and effort. Well, it does.

And so let's think about this from a planning standpoint, from a strategy standpoint. You know, I think about one of my clients who, by the way, gives me a shoebox of stuff every year. Okay, she still does it.

I just take it. I tried to tell her this. And I was just on the phone with her. And she was upset that she had to pay $600 in income taxes last year. And my accountant did her taxes. Not real upset, but she was just real inquisitive and saying, $600?

I mean, that's kind of like, that ain't much, you know, considering you didn't send anything in all year. And the reason for that is she's single, over 65. She's got a standard deduction of $14,250. So that means that that amount of income is what she has to make before she has to pay $1 of taxes. Yeah, and you say, well, most people make more than $14,250. Well, she has Social Security. That doesn't count in the number.

I mean, that's off to the side. And then she has other retirement income and a little bit of interest. And then last year, she had to pay taxes because she filed, I mean, because we pulled some money out of annuities. And so there was some tax-deferred interest that shows up on her tax return.

But it was still just $600. So when you get over this standard deduction by a little bit, I mean, the tax rate is just 10%, the federal tax rate. So it creates, if she had to pay him $600, she probably had $6,000 of taxable income.

I mean, it's kind of like that simple. And so what does this mean for planning? This lady in particular, we paid off her home when she came into some money through an inheritance about six years ago. We paid off her home mortgage. And the mortgage was about 160 grand, and it had 4% interest on that. So that's probably $6,400 of interest a year that we just paid off.

We paid off the whole 160. And so she lost that deduction, but she didn't really lose it because she gets to put down 14,250 on her taxes. So what I want people to get from this is you don't need to keep track of all your little receipts anymore other than income.

Yeah. And I think that when it comes to that mortgage thing, that's like brilliant because if you pay off your mortgage, you're not only not having to pay the interest, but the government's still giving you a big chunk as if you had a mortgage. So there's no sense in the world having one unless you actually need it for other purposes.

Because you don't have the money, which is a lot of people. But then you're getting credit for way more than your mortgage interest. I'm just saying if you've got money sitting in the bank and you're just keeping this mortgage or it's paid down and it's close to paid off, and you have an equivalent amount of money available to you, well, go ahead and pay it off. And then you don't have to pay taxes on the interest on the money that you had on the sidelines.

And you're still going to get the deduction for the mortgage interest because you get the standard deduction. And therein lies the real opportunity. Well, I hate to jump in here, but we got to go to a break. But first, we're going to remind you that the show is brought to you today, as always, by Cardinal Guide. And is the website where you can find Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement, as well as all sorts of other information where you can contact Hans, get his book as well. And we want to mention that his YouTube channel is at Cardinal Advisors, where all these videos will be on the same subjects. If you need more information, you have all those resources. Again, for the website, Cardinal Advisors for the YouTube channel.

And we'll be right back with a whole lot more on the standard deduction for 2022. Hans and I would love to take our show on the road to your church, Sunday School, Christian or civic group. Here's a chance for you to advance the kingdom through financial resources by leveraging Hans' expertise in qualified charitable contributions, veterans aid and attendance, IRAs, Social Security, Medicare and long-term care. Just go to and contact Hans to schedule a live recording of Finishing Well at your church, Sunday School, Christian or civic group. Contact Hans at

That's Welcome back to Finishing Well with Certified Financial Planner Hans Isle and today's show is the standard deduction for 2022. We're talking about taxes when it comes to standard deduction. And so there's a lot of strategies based on this magnificent, really standard deduction that they're giving us.

Well, there are. And so let's talk about charitable contributions, which is a tax deductible. I mean, you make a charitable contribution or you make them every week or you make several of them and that still is and since the beginning of time, a deduction off your taxes. And because we're a Christian radio show, I mean, that's a special interest to us because we give so much as believers to the church and to the missions and to all the things that God wants us to do and we feel called to do. And the first thing I'm going to tell people is we're not giving money, we're not doing our tithing for the tax deduction.

So I'm not giving a stewardship sermon today. I mean, I'm talking about taxes and I'm talking about with money you're giving anyhow, I'm talking about ways you can get a tax benefit for that. And since we've got this large standard deduction, you're really not getting a tax benefit for any individual contribution that you make. Or another way to look at it, you're getting credit just like you're given a whole lot, no matter how much you're giving because you're getting the standard deduction.

Does that make sense? Right. And I think that's a better way to look at it is the government's just saying, okay, we know you're going to give so much. So we're just going to front load it. So you've got that covered no matter how much you give, which does make the QCD that much more attractive, really?

It absolutely does. Now, a QCD, what we're talking about is a qualified charitable distribution. And it's money coming out of your IRA or 401k, but it actually has to be done from an IRA. So you'd need to roll your money over to do this. And you're giving the money to a qualified charity, which the church is that, and you're doing it directly from the IRA, and you're not having to pay tax on the money. So you need to be 70 and a half or older.

And so some people are listening, they're saying, well, I'm only 68, this doesn't apply to me. Well, okay, it may not apply to you this year and next year and the year after possibly, but the year after that and ongoing, it's going to apply to you. And you can give directly to the church and you can give as much as $100,000 from your IRA to the church in any one year. And it does not show up on your tax return.

Yeah, this is really amazing. So the way the strategy works, my understanding is it right, Hans, that people that are already given, so say you, you're giving $10,000 a year to your church, but that would be after tax $10,000, not before tax $10,000. So when you give that money out of an IRA that's never been taxed, we're not talking about a Roth IRA, but a traditional IRA, right? So you're taking money that's never been taxed and you're giving that money, then you're essentially able to make a distribution from your IRA without paying any tax whatsoever. And so that therein is the real benefit, right?

Well, it is. I mean, it's like, because you get the credit every year, like you gave a bunch, or if you did give a bunch through the standard deduction, and then once you get to be 70 and a half, you're going to have to take required minimum distributions. Well, really at 72, it gets a little confusing with ages because they raised that age and they're talking about raising it again, but QCDs are 70 and a half. So at that age, you can give money, never been taxed money, or hasn't been taxed yet money, directly to a charity.

If you do it properly, it's got to be done a qualified charitable distribution, a QCD, and you can send the money directly to the charity and it's not going to show up on your tax return. I mean, it's sweet. It is.

One of the things... It is also going to count as a required minimum distribution. So I have, when I talked about the person who's 68, in fact, I'm talking to some clients just here this afternoon who have, you know, in the millions, and they've got a multi-million IRAs, and I'm just, they are about that age, about 68, 67. And so we're going to begin planning those QCDs later on, okay, because they have a desire to give half their money to charity. And believe me, they've got plenty, which is very cool and very noble. And we're doing estate planning along with tax planning and income planning and social security. They're buying the whole restaurant here. And when we get to the point of their IRAs, and we're going to really stop them from doing Roth conversions, we're going to shut that down because we're going to just earmark those when they get to be 70 and a half to start giving $100,000 a year to the church.

And they can do that every year, and they can actually both do $100,000. I don't know that they're going to do that much, but they're going to do a lot, and they're going to wind down that IRA, not paying any tax on it, meet the RMD rules, the required minimum distribution, and then the beneficiaries on the IRA is going to be the church. So there's not going to be any tax paid on that IRA money, and it's less than 50% of their estate, but that's the 50% that we're giving away, or it's part of the 50%.

I mean, why give the heirs that have to pay taxes IRA money when you can give it to the church as a QCD when you're alive, and just as a beneficiary after you're deceased? Wow. But one of the critical things, right, is it's got to be the first distribution. So it's a good thing we're talking about this early in the year, right?

Yeah. So you can get into some difficulty if you've already taken distributions, and then for the year, from any of your IRAs, and then you say, oh, I just learned about QCD, I want to do the QCD, and I want to count it as my required minimum distribution, then the ordering is messed up. So these really need to be done in January if you're going to take any other money out of the IRA to live off of, okay? So it's good we're talking about them now, and we're really talking, the subject today is really income taxes and the effect of the standard deduction, because these people that I'm speaking about, I just reviewed their tax return. You know, they got in the success of 10 million, and they took the standard deduction. They took the 28,700. Well, it wasn't 28,700 last year. It was like 27,000 something. But it just, they took the standard deduction, and just, it kind of shows me that they're, that they don't really, if they would have had deductions in excess of the 27,000, they would have taken those deductions, but they didn't. They just took the standard deductions. This is working for them, and I'm showing them a way to increase their giving within their stated intent, and then we're just going to have to wait a couple of years to actually give them the money, which I'm sure the church is going to be just fine with that.

I'm sure it will be. Big lump of money starting in 2024 and thereafter, but how does this apply to the rest of us? Well, if you're already 70 and a half, and then you know what required minimum distributions are, and I'm just being clear with you, you can give that to the church. If you do it properly, you can give as much as you want. It'll count as your minimum distribution, and you're still going to get some credit on your tax return through this standard deduction. Like I said, that's sweet.

It is sweet, and you don't have to pay the taxes, and the church doesn't have to pay the taxes. So then another thing you have on your list of strategies, which I'm really curious about, it says, ensure your medical expenses. Very few people get to take off medical expenses.

First of all, there's a seven and a half percent threshold. So, you know, until your medical expenses are seven and a half percent of your adjusted gross income, they're not deductible anyhow. What I put down as a strategy is just forget the fact of deducting medical expenses. One of these short-term care plans or whatever is another place where people can have that insurance. They don't have to concern themselves with those deductions, right?

Yeah. I mean, it's just another place to ensure yourself is for long-term care. And there's insurance policies now, which have a – you actually bought one of them for you and your bride that they're very affordable, and they provide you coverage, and you just pay a premium by the month. And if this expense hits you, you'll have insurance for it instead of trying to work it off your income taxes.

Really? I guess the fourth strategy that I put down is a little bit of humor. Stop sending your account in a shoebox. I'm betting a lot of people listening still have – they bring a whole box or some of those brown envelopes that are kind of thick, and they got two or three of them just stuffed full of folders and stuff that they bring to the accountant. And a lot of that has medical expenses, prescription drug expenses, you know, every little something where they donated stuff to the Salvation Army.

And, you know, it's wonderful to do all those donations. You just don't need a receipt form anymore, and you sure don't need to give it to your accountant. Yeah, because I would imagine there are some accountants that gladly take that and charge you for all the work, but yet they know that it's not really going to benefit you in any way, shape, or form. Well, how do they know it doesn't add up to $28,700 unless they add it all up? No, and accountants love to do that. Especially when it's – you know, like I said, I have clients do this with me, and they're going to keep doing it.

And I imagine some of you are going to keep doing it, so I'm not trying to give you a lecture here. I'm just telling you that you've got just written right on your tax reform form right there, there's $28,700 in deductions put in there. Or, you know, if we looked at this in other ways, if you have $40,000 in Social Security income and $30,000 in other income, and it's, you know, like $70,000 that you've got to spend, and then you plug in the Social Security formula to see how much of that is taxable from the Feds, which is going to be pretty low with somebody in that example. And they're going to be on the 10% tax bracket for everything above $28,700. I mean, if you tell me you plug all that into the formula, they're not going to pay much in tax. They're able to keep most of the $70,000. And if they've got money in an IRA, donate that or a good bit of it for minimum distributions every year. And, you know, you're basically able to keep most of your money in retirement.

The standard deduction is just a beautiful thing. Yeah, I'm afraid we ran out of time again before we ran out of show. We want to remind you, this show is brought to you by, where you can get Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement, and of course, Hans' YouTube channel called Cardinal Advisors. Thank you, Hans.

Great show. Thank you. Finishing well is a general discussion and education of the issues facing retirees., Cardinal Advisors, and Hans Shile, CFP, sell insurance.

This show does not offer investment products or investment advice. We hope you enjoyed Finishing Well, brought to you by Visit for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Hans' best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement, and the workbook. Once again, for dozens of free resources, past shows, or to get Hans' book, go to If you have a question, comment, or suggestion for future shows, click on The Finishing Well radio show on the website and send us a word. Once again, that's, This is the Truth Network.
Whisper: medium.en / 2023-04-24 15:21:43 / 2023-04-24 15:32:25 / 11

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