Richard Rubin

speaker

1,496 appearances 29 recordings 1 series first heard Oct 2017 last heard Jan 2024

Richard Rubin’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · How High Inflation Affects Your Taxes · 28 Mar 2022 podcast

There are similar jumps in other

retirement plan limits as well.

And so that's designed to sort of account for that inflation as wages and costs and everything go up, so do those amounts.

So it's similar.

Those amounts, also the lifetime estate and gift tax exemption and the annual gift tax exemption are also indexed for inflation.

So now, you know, the estate tax exemption is around $12 million and that bumps up somewhat every year.

The gift tax exclusion, the amount that you can give to any other person without that becoming part of your lifetime exemption...

jumps from 15,000 to 16,000.

Yeah, so at times of high inflation, the pieces that are not indexed for inflation kind of become more important because they stick out more.

So one is there's a $3,000 limit on the amount of capital losses that you can use to offset ordinary income.

And that's been that way since the 70s.

There's also the rules that set how much Social Security income you can get before it starts being taxed as income.

And those were set in the 80s, intentionally not indexed so that they grew over time.

So there's a number of provisions, some with little rhyme or reason scattered throughout the tax code that just never change unless Congress comes along and specifically changes them.

Right.

So that's a loss on an investment that you can subtract from your wage income.

And there's a limit on that.

Congress doesn't want people to create losses and be able to kind of offset their wage income in an unlimited way, but it provides a small exemption from that.

But that $3,000 limit on how much you can subtract just hasn't changed at all in more than 40 years.

So, yeah, Democrats have talked about raising that number.

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