7 Big Tax Changes That Could Affect Your Refund

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March 8, 2022

Every year, it feels like I do a lot of work to prepare my taxes — and I don’t even do them myself. Just gathering the paperwork for my accountant is a project. Keeping up with the latest tax changes is another. Luckily, my colleagues have me covered on that score. Today’s featured story looks at seven changes that might affect your return, and your refund if you’re owed one.  I’m not. I sold a highly appreciated mutual fund this year, so I’m going to owe some hefty capital gains taxes. It was the right move, though. The fund had high fees, so I should’ve ditched it a long time ago. Oh well. I don’t believe in stewing too much about delayed money moves (or lost real estate transactions). Onward!

Best wishes,
 
 
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Timely Retirement News, Insights and Advice

Among other changes, the standard deduction has been raised.

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Reader of the Week

What are you up to these days?

I moved and traveled extensively for my career and personally with my wife. Since all three of our children live in the Charlotte area, we are mostly home-bodies now during Covid, and we enjoy spending time with and helping them and our one grandson. I enjoy organizing ancestry memorabilia and posting to Ancestry.com in my spare time. My wife and I have been married for 51 years and are both from South Bend, Indiana, went to Indiana University and lived in Indiana, Ohio, Pennsylvania and Massachusetts and now North Carolina.
 
Nice! What’s your best advice on preparing for retirement?
 
I retired 4 years ago when I was 69 ½. It turns out that working those extra 3 ½ years added 28% to my Social Security checks, giving us a great financial cushion. This is a great benefit that I’m afraid most people don't take advantage of.
 
Now we can live comfortably on Social Security and have not had to dip into any savings or investments. It also gave me the freedom to be more aggressive in the stock market and make 10 times more money in the market than I had made working for 40+ years.  That brings me a second point I wanted to make: The fees that financial advisors have racked up over the years at my expense were outrageous. This led to my low starting point for investing cash.
 
Once I retired I moved all of my accounts to one place (Vanguard) so I could watch them easier. Then I began trying different newsletters until I settled on three that gave me a blend of long-term and short-term philosophies for investing in stocks and set me up for huge earnings in the market. (Of course, the great bull market was a help too!)  The moral here is that individuals can become investors on their own if they take the time and have the interest.
 
So true! Any regrets you’d like to share (financial or otherwise)?
 
When I first got into stocks I wanted to start out small to get my feet wet. So, I bought lots of penny stocks based on recommendations that various unscrupulous people were promoting. I lost most of my money but it was a good learning experience. I just last month finally sold the last of my penny stocks.
 
For me, the crypto market feels like a lot of hype which is allowing some people to make money but most probably not having a clue about what they are getting into. My two sons have dabbled some already, and one has lost money and the other broke about even so far.  It's just not for me, I have already learned my lesson on speculative offers.

Retirement News From Around The Web

Big Financial Questions? Step Away From the Spreadsheet
Your heart should help guide you on some big questions. MORNINGSTAR

Target Date Retirement Funds Work up to a Point
Here’s when you may want to reconsider (hint: it’s in your 50s.) CNBC

What’s So Great About Retirement?
The Freakonomics radio podcast talks about resisting the pull of television in retirement. NO STUPID QUESTIONS

After Widowhood Comes a Second Act with Purpose
A woman helps bereaved clients navigate the grieving process. NEXT AVENUE

Elizabeth O'Brien is deputy editor at Money. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at elizabeth.obrien@money.com and follow her on Twitter at @elizobrien.

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