Two Decades of Inflation

After being largely dormant for the last decade, inflation roared back in 2021 due to various factors related to the pandemic and economic recovery. For perspective, it may be helpful to look at inflation over a longer period of time. During the 20-year period ending September 2021, the Consumer Price Index for All Urban Consumers (CPI-U), often called headline inflation, rose a total of 53.8%. While the prices of some items tracked the broad index, others increased or decreased at much different rates.

Source: U.S. Bureau of Labor Statistics, 2021 (data through September 2021)

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IPI Market Update for the week of March 11th, 2022

Last week was pretty schizophrenic, where a highly volatile equity market churned alongside a surge higher in interest rates, a strong USD, and
weaker commodity markets (with the exception of spot nickel +44%). For the week, U.S. equity markets were down nearly 3% while developed
international markets, particularly Europe (+4.5%), held up better. U.S. Treasuries took a notable step down as interest rates moved sharply
higher across the curve while broad based weakness across the commodity spectrum was paired with a strong USD.  Click the link below to read more.

TKA 3.14.22

Medicare premiums, deductibles, and coinsurance amounts change annually. Here’s a look at some of the costs that will apply in 2022 if you’re enrolled in Original Medicare Part A and Part B. Continue reading “”

Home-Sweet-Home Equity

Buying a home is a long-term commitment, so it’s not surprising that older Americans are much more likely than younger people to own their homes “free and clear” (see chart). If you have paid off your mortgage or anticipate doing so by the time you retire, congratulations! Owning your home outright can help provide financial flexibility and stability during your retirement years.

Even if you still make mortgage payments, the equity in your home is a valuable asset. And current low interest rates might give you an opportunity to pay off your home more quickly. Here are some ideas to consider.

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Key Numbers Projected for 2021

Key Numbers Projected for 2021

Even though the official numbers have not yet been published by the IRS, we wanted to send over the projected key tax figures for 2021. When the official numbers are released, we’ll share an update with an associated Email Alert.

Standard deduction
2020 Projected for 2021
Married filing jointly $24,800 $25,100
Head of household $18,650 $18,800
Single $12,400 $12,550
Married filing separately $12,400 $12,550
Standard deduction for dependent Greater of $1,100 or $350 + earned income Greater of $1,100 or $350 + earned income
Additional standard deduction for blind or aged (65 or older)
Single/Head of household $1,650 $1,700
All others $1,300 $1,350
Taxable income threshold for top 37% income tax bracket
2020 Projected for 2021
Married filing jointly $622,050 $628,300
Head of household $518,400 $523,600
Single $518,400 $523,600
Married filing separately $311,025 $314,150
Long-term capital gain 20% threshold (based on taxable income)
2020 Projected for 2021
Married filing jointly $496,600 $501,600
Head of household $469,050 $473,750
Single $441,450 $445,850
Married filing separately $248,300 $250,800
Alternative minimum tax (AMT)
2020 Projected for 2021
Maximum AMT exemption amount
Married filing jointly $113,400 $114,600
Single/Head of household $72,900 $73,600
Married filing separately $56,700 $57,300
Exemption phaseout threshold
Married filing jointly $1,036,800 $1,047,200
Single/Head of household $518,400 $523,600
Married filing separately $518,400 $523,600
26% on AMTI* up to amount, 28% on AMTI above amount
Married filing separately $98,950 $99,950
All others $197,900 $199,900

*Alternative minimum taxable income

Kiddie tax: Child’s unearned income
2020 Projected for 2021
Above this amount taxed using parents’ tax rates $2,200 $2,200
2020 Projected for 2021
Contribution limits
Traditional and Roth IRAs (combined) $6,000 ($7,000 if age 50 or older) $6,000 ($7,000 if age 50 or older)
Roth IRA income phaseout range (contributions)
Single/Head of household $124,000 to $139,000 $125,000 to $140,000
Married filing jointly $196,000 to $206,000 $198,000 to $208,000
Married filing separately $0 to $10,000 $0 to $10,000
Traditional IRA income phaseout range (deductibility)
1. Covered by an employer-sponsored plan and filing as:
Single/Head of household $65,000 to $75,000 $66,000 to $76,000
Married filing jointly $104,000 to $124,000 $105,000 to $125,000
2. Not covered by plan but filing joint return with covered spouse $196,000 to $206,000 $198,000 to $208,000
3. Married filing separately and either spouse is covered by plan $0 to $10,000 $0 to $10,000
Estate planning
2020 Projected for 2021
Top gift, estate, and generation-skipping transfer (GST) tax rate 40% 40%
Annual gift tax exclusion $15,000 $15,000
Noncitizen spouse annual gift tax exclusion $157,000 $159,000
Gift tax and estate tax applicable exclusion amount $11,580,0001 + DSUEA2 $11,700,0001 + DSUEA2
GST tax exemption $11,580,000 $11,700,000

1Basic exclusion amount

2Deceased spousal unused exclusion amount


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A little bit of insight to share

Here are some bullet points that came across my desk today.  I hope they help make some senses out of the passage of the recent Acts.

Highlights of the SECURE Act include:

Age restrictions on contributions to a Traditional IRA have been eliminated

  • For clients born on or after July 1, 1949, the age for starting required minimum distributions
  • (RMDs) has been increased to 72
  • Beneficiary distribution choices for deaths that occur starting in 2020 have been changed/updated
  • Distributions for qualified birth or adoption expenses are penalty-free up to $5,000

Highlights of the CARES Act include:

  • RMDs, including those from Beneficiary IRAs, have been waived for 2020
  • Coronavirus-related distributions (CRDs) are penalty-free up to $100,000 through December 30,
  • 2020
  • CRDs can be repaid over three years, or taxes can be spread over three years