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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 CardinalGuide.com for free!

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

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This is Rodney from the masculine journey podcast. We explored manhood within Jesus Christ your chosen Truth Network podcast starting in just a few seconds. Sit back and enjoy it, share it, but most of all, thank you for listening and choosing The Truth Podcast Network. This is the Truth Network welcome to finishing well brought to you by Cardinal guy, certified financial planner longs a child, best-selling author and financial planner helping families finish well over 40 years of finishing well and will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well, finishing well is a general discussion and education of the issues facing retirees guide.com are no advisors on trial CFP some insurance this show does not offer investment products or investment advice welcome to finishing well is certified financial planner Honshu Island today show is the standard deduction for 2022.

Not to be confused with you know the taxes that you probably just filed for 2021 were talked about the standard deduction for the year that were currently in, which I think you can find the show to be enlightening and that's what 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.

But it is a wonderful story that I heard recently that just illustrates and 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 we try to learn how to be good stewards of the things that God has given us, especially our taxes and those kind of things are retarded about today, but there was a boy and he was standing on the beach and there was this big aircraft carrier that was hand off in the distance and the little boy was standing on the Sandinistas waving like crazy this aircraft carrier is the elder man comes up and lieutenants and son, what are you doing and he said oh I'm waving an aircraft carrier so that when it comes close. You have the capital come down and waved to me and the man said son that that captains very busy man.

He doesn't see you waving all the hearings I can come down off the bridge. The way to you and he goes really well because Lloyd makes you so sure that he said well it's my dad.

The boiler that is that oh yeah, I mean the father is your father, and he is these certainly find some a lot bigger in an aircraft carrier that he's more than willing to come down and waved 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 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 on in the later index or employee every year. The real point I want to make many people that come in to see me. They didn't get the memo back in 2018. That now that the big standard deduction and so we don't have to keep track of a lot of stuff and it were you aware that until dictate to you can learn it for me actually was doing my own taxes and so that I learned about the standard deduction but I didn't realize all the ramifications and so I started doing shows with US for sure. Yeah so you got married couple filing jointly were both 65 and over the numbers $28,700 standard deduction and for a married couple under 65, or both are under 65 is 25,904 single people. Single person 65 and over is 14,250 and people under 65 is 12,000 950,000 John most people meant maybe they're kind of aware of it they really think of the implications of this. Even if there aware. This number used to be like for $5000 and now it's 28,700 and it was really the tax Reform Act of the tax cuts and job act of 2017. And their goal.

If you remember, was to be able to simplify taxes and make you be able to do them on the poster and unity just fill it out on a postcard and send it in.

You know, how's that working for quite meeting and I'll do something really pretty wonderful out from the standpoint of wow the record-keeping is so much east what what we used to have to do what what yeah but again most people didn't get the memo on the Client that I don't actually do their taxes form because that do that as part of my practice in the time that week we have a CPA that is affiliated with us and he does a lot of taxes for a lot of our client and so I have a number of older clients that I still get the stuff from them but you can email it to me now that they want me to come over and the hand mailboxes and nearly got medical receipt yet all the interest they pay. I do need interest, they received 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 on the charitable contributions in over 20 bucks here 10 bucks here $50 a week into the church and unite make sense for Dennis her whole life. So they keep track of all of it in black get the tax deduction.

I think they still are holding on the belief that they're getting a tax deduction were either contributions or interests are paying.

Yeah, I guess in some ways they are.

They only keep track of it.

The tax person and they're getting $28,700 up there, a married couple over 65 so I want to make that point and what I wanted to make a point on is 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 in nonclinical endless those enemies. For most people they had a home or they have a home mortgage Outlook retired people have their mortgage paid off paid for it and they live in their mortgage treatment. People under 65 vote, but I have a home mortgage and so the interest on that mortgage is been deductible since I was a baby and is still deductible, but that the number that's included in the 28,700 so I don't I don't file a I don't itemize my actions. I just take the standard deduction like everyone else.

So even though I got a pretty big mortgage. My mortgage is like $380,000 of my house and the interest rate like 3% so I have like $10,000.

Well, so I could take that $10,000 my taxes but I still am nowhere near 28,700 and then charitable contributions. So I give generously, but you know you at all add up and it's probably like $80,000 over the course of the year's an hour up to 18,000.

And then I can write off my state and local taxes up to 10,000 there about another 6000 for me so time I add up all the deductions I met like $24,000. The government really didn't give me anything other than the fact that you know you really need to keep track of when you can unit we just can't let you write this number down on your tax return and you can forget all the receipt make sense now math six. Cockeyed success is all that stuff that you knows like China hung up. You know what you paid on your state taxes not stuff to do it all takes time and effort. Does Phyllis think about this from a planning standpoint. From a strategy standpoint I think about one of my clients, who by the way, give me a shoebox. Every year ~take try to tell her 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 account did her taxes not not real upset but she just really inquisitive since 600 box and that's how I much you know.

He didn't say anything in our year and and and the reason for that is she single over 65 show standard deduction of $14,250 so that means that the net amount of income is wishy estimate before shift.

Dollar taxes and the single most people make more than 14,250 well. She has Social Security that doesn't count the number not talk to the side and then she has another retirement income and limited interest in them. Last year he had paid taxes because she filed me because we people for money out of annuities and so there was tax-deferred interest that shows up on her taxidermist of the six firebox so when you get over the standard deduction by a little bit mean the tax rate is 10% federal tax rate so it creates ship everything firebox, you probably have $6000 of taxable income inflicted, like that simple and so what does this mean for planning this lady in particular, we paid off her home when she came in to some money through an inheritance about six years ago we paid off her home mortgage. The mortgage was about 160 Crandon at 4% interest on that.

So that's probably $6400 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 counterattacks really down there is you don't need to keep track of all your little receipts anymore other than income and I think that when it comes that mortgage thing. It's like brilliant because if you pay down your if you pay off your mortgage.

You not only not having to pay the interest but the government still given you a big chunk as if you had a mortgage, so there's no sense in the world And one that you know unless you actually needed for the and other purposes. Don't have the money right 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 got money sitting in the bank and you just keep in this mortgage or to pay down and cluster paid off. You have an equivalent amount of money available to you will gladly pay it off and then you don't have to pay taxes on the interest on the money that you had on the sidelines in your survey to get the deduction for the mortgage interest. Could you get the standard deduction. And therein lies the real opportunity I had to jump in here, but we gotta go to break the first number remind you that the show was brought to the day is always my cardinal guide and cardinal guide.com is the website where you can find Thompson's book the complete cardinal guide to planning for living in retirement is well as all sorts of other information or you can contact Hans get his book as well that 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. Cardinal guide.com. The website cardinal advisors for the YouTube channel and will be right right back with a whole lot more on the standard induction for 2022 pounds and I would love to take our show on the road to your church, Sunday school, Christian or civic room. There's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance and IRA Social Security care and long-term care.

Just go to cardinal guide.com and contact time to schedule a live recording of finishing well at your church, Sunday school or civic contact Hans at cardinal guide.that's cardinal guide.com welcome back to finishing well, a certified financial planner Hans Island today show is the standard deduction for 2022 were talking about taxes when it comes to standard deduction and so there's a lot of strategies based on this in a magnificent really standard deduction that there give us talk about charitable contributions, which is tax-deductible. You make a charitable contribution or you may come every week or you make several of them and that still is the beginning of time. I deduction off your taxes and because were Christian radio show coming.

That's a special interest to us because we we give some lapses believers to the church and to the missions into all the things that God wants us to do and we feel called to do and the First Family tell people's were not given money not doing archiving the tax deduction so I know I'm not given stewardship sermon today. I mean I'm talking about taxes and I'm talking about with money are getting anyhow I'm talking about ways you can get a tax benefit from an since we got this large standard deduction. You're really not getting a tax benefit for any individual contribution that you may or another way to look at it you're getting credit just like you're given a whole lot matter how much you getting because you give the standard deduction that makes sense.

That's that's a better way to look at it is the governments dissent. Okay, we know you're going to get some much for the disconnect frontloaded so you got that covered. No matter how much you give which does make the Q CD that much more attractive really is absolutely no Q CD. What were talking about a qualified charitable distribution money coming out of your IRA or 401(k), but it actually has to be done from an IRA CD to roll your money over to do 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 know you need to be 70 1/2 or older and this is some people are listening, 68 is then applied to me. Well, okay, it may not apply to you this year or next year and the year after. Possibly the year after that and ongoing it can apply to you and you can give directly to the church 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 time.

This is really amazing. So the way the strategy works.

My understanding is that right Hans that people are ready given some say you you're giving $10,000 a year to your church with you what that would be after-tax $10,000, not before tax $10,000. So when you get that money out of an IRA that's never been taxed if were not talk about a Roth IRA but a traditional IRA right you taken money, there's never been taxed in your giving that money then you're essentially able to you know make a distribution from your IRA without paying any tax whatsoever, and so that therein is the real benefit right what is like to get the credit. Every year like he gave about really did get a bunch through the standard deduction and then once you get to be 70 and have your aunt dictate required minimum distributions will really at 72 little confusing with ages as they raised that agent talk about raising it again. But PCVs are 70 1/2 so at that age, you can give money never been taxed money has been taxed yet money directly to a charity.

If you do it properly is to be done. A qualified charitable distribution Q CD and you can send the money directly to the charity is not shot on your tax return mid-swing is also going to count as a required minimum distribution. So I have my talk about the person is 68.

In fact, I'm talking to some clients here this afternoon who have no in the millions. And they've got a multimillion IRA and I'm just they are about that age about 6867 and so begin planning those two CDs later on. Okay, because they have a desire to give half their money to charity, and the limited Language is very cool and very noble, and were doing estate planning along tax planning and income planning and Social Security were there final restaurant here and when we get to the point of their IRAs and really stop them from doing Roth conversions shut that down because were going to just your mark those when they get to be 70 1/2 to start giving hundred thousand dollars a year to the church and they can do that every year and they can actually both 200,000. I don't know that they're going to do that much but they're going to do a lot and they're gonna wind down that IRA not paying any tax on the RMD rules required minimum distribution and then the beneficiaries on the IRA is coming to church so that I can be any tax paid on an IRA money and it's less than 50% of their estate.

That's the 50% that were given away part of the 50% meeting. Why give the heirs that have to pay taxes IRA money when you can give to the church is a PCD when you're alive just as a beneficiary appeared seeks while one of the critical things right is it's going to be the first distributions so it's a good thing or talk about this early in the early yet so you you can get is a difficulty if you've already taken distributions and then for the year from any of your IRAs and then you say all I listened.

About the only duty. Katie and I want count as my required minimum distribution that that the ordering is messed up so you really need to be done in January.

Take any other money out of the IRA to level okay so good were talking about him now and were really talking the subject today is really income taxes and the effect of the standard deduction. These people that I'm speaking about. I just reviewed the tax return, they think of in excess of 10 million and they they they took the standard deduction at 28,007 11, 28,700 last year.

27,000. They took the standard deduction and just shows me that there that they don't really if they would've had deduction in excess of 27,000 they would've taken those deductions, but they didn't. They just took the standard deduction is working for them and I'm showing them a way to increase their giving within the stated intent and they were just going have to wait a couple years actually give him the money, which I'm sure the churches can be just fine with lots of money starting at 2024 and thereafter. But how does this apply to the rest of us will you're already 70 1/2 and then you know it required minimum distributions are in clear with you can give that to the church.

If you do it properly. You can give as much as you wanted a counter minimum distribution and are still many get some credit on your tax return for the standard deduction. I said that swing discrete taxes in the church that left taxes so then another thing you have on your list of strategies which I'm really curious about it says insure your medical expense. Very few people take all medical expenses 7 1/2% threshold know until your medical expenses are 7 1/2% of your adjusted gross income not deductible any what what I put down the strategy is to forget the fact deducting medical expense of short-term care plans or whatever is another place where people can have that insurance and they don't have to concern themselves with those deductions right yeah I mean it just another place to ensure your sellers for long-term care and there's insurance policies now would have you actually bought one of those for you and your bride that. They're very affordable and provide you coverage these pay a premium by the month and this is expense.

If you have insurance for it. Instead of trying to work it off your income taxes for strategy development down is a little humor stop sending your account in a shoebox. I'm betting a lot of people listening still have the braille boxer. Some of the brown envelope that account to get two or three of just stuff: folders and stuff that they bring to the account and a lot of that has medical expenses prescription drug expenses you know every little something really donated stuff to the Salvation Army and is wonderful to do all of the nation. You just don't need a receipt form anymore and you sure don't need to give to your account back as I would some accounts. I gladly take that In Charge of work but yet they know that it's it's not really going to benefit you in any way shape or form. While they know it doesn't add up to 28,700.

Let's add it all up now and the counselor specially when it feel like it that I plan to do this with me and you keep doing it and I met some of you agree to keep doing it so I'm not trying to give you a lecture here and telling you that you got written right on your tax reform form right there is 28,700 box deductions put in their work. You know, we look at this in other ways. If you have $40,000 in Social Security income and $30,000 in other income you like $70,000 that you got to spend and then you plug in the Social Security formula to see how much of that is taxable from the fence which is going to be pretty low with somebody in that example began.

They're going to be in the 10% tax bracket for everything above 28,710. You put all that into the formula than I can pay much in there able to keep most of the $70,000 if they got money in an IRA donate that or a good bit for minimum distributions every year and you basically able to keep most your money in retirement.

The standard deduction is beautiful.

I'm afraid we ran out of time again before he ran on so we want to remind you ask the show sponsored by Cardinal guide.com or you can get construct a complete cargo guide to planning for and living in retirement and a course on his YouTube channel called the Cardinal advisors. Thank you Hans great show. Thank you. Finishing well is a general discussion and education of the issues facing retirees Cardinal guide.com Cardinal advisors upon trial CFP some insurance this show does not offer investment products or investment advice. We hope you enjoyed finishing well brought you by Cardinal guide.com visit Cardinal guide.com for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as ponds 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 what you get. Hans book of the Cardinal guide.com 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 Cardinal guide.com Cardinal guide.com this is the Truth Network


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