Life Events and taxes

[msimms22]

I have some major life events in 2022 (listed below). Are there any changes to the tax rules for these events?

1. I retired from the government and moved in 2022. Are moving expenses deductible?

2. I withdrew all of my 401K funds to purchase a house. Federal Withholding was 20%. I know this will put me in a higher tax bracket and will just have to wait and see whether I have enough deductions to offset.

3. I have significant medical expenses. What are 2022 tax rules medical expense deductions?

4. Are there any changes to charitable contributions? My contributions will be higher this year.

5. I bought a home. Any changes to deductions for home owners?

[ES CPA]

@msimms22  Good afternoon.  Congratulations on your retirement and new home!  The following are my answers to your queries:

1. No. Moving expenses have always had to be job related.  For tax years 2018 and later, moving expenses can only be claimed by certain military personnel.  

2. If you are over age 59 1/2; you will only have to pay income tax on the 401K distribution.  If you are under age 59 1/2, you will also be subject to an early withdrawal penalty of 10%. 

3. For 2022 taxes, to medical expenses can be claimed as an itemized deduction to the extent that unreimbursed medical expenses exceed 7.5% of your adjusted gross income (which may be higher this year due to the 401K distribution)

4. For tax year 2022; you can no longer claim limited charitable contributions if you utilize the standard deduction.  You can claim charitable contributions if you itemize.

5. Generally homeowners can deduct real estate tax and mortgage interest as itemized deductions.  As a new homeowner, you can also deduct points paid to secure the mortgage and any deductible items you paid at closing; for example real estate taxes reimbursed to the seller.  Here is a link to a TurboTax article and video that gives great information about home ownership tax deductions .