tax limits - Linkenheimer LLP CPAs & Advisors

Looking Ahead to 2025 Tax Limits as You Prepare to File Your 2024 Return

Chances are, you’re more concerned about your 2024 tax return right now than you are about your 2025 tax situation. That’s understandable because your 2024 individual tax return is due to be filed by April 15 (unless you file for an extension).

However, it’s a good time to familiarize yourself with tax amounts that may have changed for 2025 due to inflation. Not all tax figures are adjusted annually for inflation, and some amounts only change when Congress passes new laws.

In addition, there may be tax changes due to what’s happening in Washington. With Republicans in control of both the White House and Congress, we expect major tax law changes in the coming months. With that in mind, here are some Q&As about 2025 tax limits.

I haven’t been able to itemize deductions on my last few tax returns. Will I qualify for 2025?

Beginning in 2018, the Tax Cuts and Jobs Act eliminated the ability to itemize deductions for many people by increasing the standard deduction and reducing or eliminating various deductions. For 2025, the standard deduction amount is $30,000 for married couples filing jointly (up from $29,200 in 2024). For single […]

By Linkenheimer LLP|2025-02-06T20:28:14+00:00February 6th, 2025|2025, deduction, deductions, New Tax Laws, News|0 Comments

Many Tax Limits Affecting Businesses Have Increased For 2023

An array of tax-related limits that affect businesses are indexed annually, and due to high inflation, many have increased more than usual for 2023. Here are some that may be important to you and your business.

Social Security tax

The amount of employees’ earnings that are subject to Social Security tax is capped for 2023 at $160,200 (up from $147,000 for 2022).

Deductions

Section 179 expensing:
- Limit: $1.16 million (up from $1.08 million)
- Phaseout: $2.89 million (up from $2.7 million)
Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at:
- Married filing jointly: $364,200 (up from $340,100)
- Other filers: $182,100 (up from $170,050)

Retirement plans

Employee contributions to 401(k) plans: $22,500 (up from $20,500)
Catch-up contributions to 401(k) plans: $7,500 (up from $6,500)
Employee contributions to SIMPLEs: $15,500 (up from $14,000)
Catch-up contributions to SIMPLEs: $3,500 (up from $3,000)
Combined employer/employee contributions to defined contribution plans (not including catch-ups): $66,000 (up from $61,000)
Maximum compensation used to determine contributions: $330,000 (up from $305,000)
Annual benefit for defined benefit plans: $265,000 (up from $245,000)
Compensation defining a highly compensated employee: $150,000 (up from $135,000)
Compensation defining a “key” employee: $215,000 (up from […]

By Linkenheimer LLP|2023-02-07T19:16:44+00:00February 7th, 2023|business, tax implications|0 Comments

Numerous Tax Limits Affecting Businesses Have Increased For 2022

Many tax limits that affect businesses are annually indexed for inflation, and a number of them have increased for 2022. Here’s a rundown of those that may be important to you and your business.

Social Security tax

The amount of an employee’s earnings that is subject to Social Security tax is capped for 2022 at $147,000 (up from $142,800 in 2021).

Deductions

Standard business mileage rate, per mile: 58.5 cents (up from 56 cents in 2021)
Section 179 expensing:
- Limit: $1.08 million (up from $1.05 million in 2021)
- Phaseout: $2.7 million (up from $2.62 million)
Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at:
- Married filing jointly: $340,100 (up from $329,800 in 2021)
- Single filers: $170,050 (up from $164,900)

Business meals

In 2022 and 2021, the deduction for eligible business-related food and beverage expenses provided by a restaurant is 100% (up from 50% in 2020).

Retirement plans

Employee contributions to 401(k) plans: $20,500 (up from $19,500 in 2021)
Catch-up contributions to 401(k) plans: $6,500 (unchanged)
Employee contributions to SIMPLEs: $14,000 (up from $13,500)
Catch-up contributions to SIMPLEs: $3,000 (unchanged)
Combined employer/employee contributions to defined contribution plans: $61,000 (up from $58,000)
Maximum compensation […]

By Linkenheimer LLP|2022-01-19T23:55:14+00:00January 19th, 2022|deduction, deductions, New Tax Laws, retirement, tax planning|0 Comments

How Will Revised Tax Limits Affect Your 2022 Taxes?

While Congress didn’t pass the Build Back Better Act in 2021, there are still tax changes that may affect your tax situation for this year. That’s because some tax figures are adjusted annually for inflation.

If you’re like most people, you’re probably more concerned about your 2021 tax bill right now than you are about your 2022 tax situation. That’s understandable because your 2021 individual tax return is generally due to be filed by April 18 (unless you file an extension).

However, it’s a good idea to acquaint yourself with tax amounts that may have changed for 2022. Below are some Q&As about tax amounts for this year.

I have a 401(k) plan through my job. How much can I contribute to it?

For 2022, you can contribute up to $20,500 (up from $19,500 in 2021) to a 401(k) or 403(b) plan. You can make an additional $6,500 catch-up contribution if you’re age 50 or older.

By Linkenheimer LLP|2022-01-13T21:59:48+00:00January 13th, 2022|New Tax Laws, tax implications, tax planning|0 Comments

Numerous Tax Limits Affecting Businesses Have Increased For 2020

An array of tax-related limits that affect businesses are annually indexed for inflation, and many have increased for 2020. Here are some that may be important to you and your business.

Social Security tax

The amount of employees’ earnings that are subject to Social Security tax is capped for 2020 at $137,700 (up from $132,900 for 2019).

Deductions

Section 179 expensing:
- Limit: $1.04 million (up from $1.02 million for 2019)
- Phaseout: $2.59 million (up from $2.55 million)

Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at:
- Married filing jointly: $326,600 (up from $321,400)
- Married filing separately: $163,300 (up from $160,725)
- Other filers: $163,300 (up from $160,700)

Retirement plans

Employee contributions to 401(k) plans: $19,500 (up from $19,000)
Catch-up contributions to 401(k) plans: $6,500 (up from $6,000)
Employee contributions to SIMPLEs: $13,500 (up from $13,000)
Catch-up contributions to SIMPLEs: $3,000 (no change)
Combined employer/employee contributions to defined contribution plans (not including catch-ups): $57,000 (up from $56,000)
Maximum compensation used to determine contributions: $285,000 (up from $280,000)
Annual benefit for defined benefit plans: $230,000 (up from $225,000)
Compensation defining a highly compensated employee: $130,000 (up from $125,000)
Compensation defining a “key” employee: $185,000 (up from $180,000)

Other employee benefits

Qualified transportation fringe-benefits employee income exclusion: $270 per month (up […]

By Linkenheimer LLP|2020-09-03T20:03:17+00:00March 3rd, 2020|business, deduction, deductions, employer, New Tax Laws, retirement|0 Comments