Stephen Merritt, CPA, PC | Certified Public Accountants | (757) 420-5778
233 Business Park Drive, Suite 104, Virginia Beach, VA 23462
Your monthly news & updates
- IRS 2022 Limits
- Protecting Yourself From Supply Chain Shortages
- Happenings at SMCPA
- Hours of Operation
IRS 2022 Limits
Each year, the IRS adjusts tax rates, standard deduction amounts, and other limits to account for tax law updates and cost-of-living adjustments.
Currently for 2022, there are seven tax brackets: 10%, 12%, 24%, 32%, 35%, and 37%. Your filing status (example: single, married filing jointly, head of household) will be the determining factor of where your taxable income will fall within the tax brackets. Keep in mind that should the Build Back Better Act pass in its current form, tax brackets will be reorganized and expanded.
Standard deduction amounts will increase to $12,950 for individuals and married couples who file separately, $19,400 for head of household, and $25,900 for married couples who file jointly.
Long-Term Capital Gains tax rates (0%, 15%, and 20%) remain unchanged, but the income level has changed:
Married filing jointly: 0% rate for income up to $83,350. 15% rate for income between $83,351 and $517,200. 20% rate for income over $517,200
Single taxpayers: 0% rate for income up to $41,675. 15% rate for income between $41,676 and $459,750. 20% rate for income over $459,750
Head of household: 0% rate for income up to $55,800. 15% rate for income between $55,801 and $488,500. 20% rate for income over $488,500
Other popular limit increases and credit adjustments for 2022 include:
- Estates of those who die during 2022 have an exclusion amount of $12,060,000
- Annual exclusion for gifts increases to $16,000
- Maximum adoption credit is $14,890
- Earned income credit maximum limit is $6,935
- Alternative Minimum Tax exemption amount for single filers is $75,900 and begins to phase out at $539,900. For joint filers, the exemption amount is $118,100 and begins to phase out at $1,079,800.
- Foreign income exclusion amount is $112,000
- Flexible Spending Arrangement contributions via salary reduction has increased to $2,850
- 401(k) limit increases to $20,500
- Educator expenses increase to $300 for expenses paid for books, supplies, and other classroom materials.
Protecting Yourself from Supply Chain Shortages
The past few years have seen major kinks in the supply chain due to a number of reasons: aberrant buyer behavior, source material scarcity, government shutdowns, and worker shortages, to name a few. What can a business owner do to protect their businesses from shortages and therefore, revenue loss? Let’s take a look at a few ideas.
Source New Suppliers
Being dependent on only one supplier for a key item is risky. Increase your options by finding new suppliers to use as backups or alternates whenever you can. While it’s admirable to buy local, it’s not always possible. Expanding your network will provide you with a lot more flexibility, even if you have to pay a bit extra at times.
Understand Your Timeline
How accurate is your prediction of lead time? Are you providing enough time from ordering and delivery before you need the part in house? Timelines have changed a lot in the last year. Spend some time reviewing and recalculating lead time if you need to.
Get good at forecasting so that you can anticipate and prevent inventory shortages before they occur. We can help you set up the correct spreadsheets and generate the right reports so you’ll have better information for decision-making in this area of your business.
The more dependent your business is on a particular supplier, the more you want to develop that relationship. Adding that personal touch might not help you get your orders faster, but when troubleshooting is needed, you’ll want the extra help a personal relationship can provide.
Increase Communication and Collaboration
Increase communication with your suppliers so they can manage their own timelines and supply chains better. Provide them with accurate forecasts and let them know how they can better meet your needs in the present and in the future.
Audit Inventory Records Frequently
If your inventory balances are only adjusted once a year, inaccurate inventory numbers are likely to cause problems. Find ways to take inventory more often, or at least increase the accuracy of inventory balances. The savings will be worth it; you’ll have fewer surprise out-of-stock or back-order situations that can cost not only sales but also customer loyalty.
Proactively Manage Shipping
There may be times when paying rush charges on shipping is justified simply to get the parts in house. Actively managing shipping and in-transit items will help you keep a handle on this. When possible, line up alternate shipping methods in case one method becomes unreliable. This is especially advised with overseas shipments where more can go wrong.
Create a Supply Chain Task Force
If supply chain issues are critical in your business and have been costing you profits, it might be time to create a dedicated team to manage and prevent crises. Consider putting together a group of employees that can be responsible for strengthening your supply chain.
Try these ideas to smooth out supply chain woes in your business.
Happenings at SMCPA
Tax Season is upon us! Check out that leaning tower of files, with Vic and Peaches for height comparison!
Tax Season Hours
Tax Season Schedule December 10, 2021 – May 2, 2022
Monday – Friday
8 AM to 5 PM
Coronavirus Disease (COVID-19)
Stephen Merritt, CPA, P.C. understands the challenge the impact COVID-19 has on our community.
Fully-Vaccinated individuals are not required to wear a mask while in our office.
Unvaccinated or not Fully-Vaccinated individuals must wear masks and follow COVID-19 protocol, such as social distancing, while in our office to stop the spread of COVID-19.
Tax documents may be mailed, FAXed, emailed, uploaded to client portal, or dropped off.
Final Returns can be picked up or mailed out.
As always, please call, we are happy to assist.
Stay safe and healthy!