2022 Federal Income Tax Brackets, Standard Deductions, Tax Rates

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2022 Federal Income Tax Brackets, Standard Deductions, Tax Rates
2022 Tax Brackets
RateMarried Filing JointlySingle IndividualHead of HouseholdMarried Filing Separately
10%$20,550 or less$10,275 or less$14,650 or less$10,275 or less
12%Over $20,550Over $10,275Over $14,650Over $10,275
22%Over $83,550Over $41,775Over $55,900Over $41,775
24%Over $178,150Over $89,075Over $89,050Over $ 89,075
32%Over $340,100Over $170,050Over $170,050Over $170,050
35%Over $431,900Over $215,950Over $215,950Over $215,950
37%Over $647,850Over $539,900Over $539,900Over $323,925

Because to the Tax Cuts and Jobs Act of 2017, there is no longer a personal exemption. Taxpayers whose net investment income exceeds the IRS limit ($200,000 for an individual taxpayer, $250,000 married filing jointly, or $125,000 married filing separately) are subject to a 3.8% net investment income tax (NIIT).

Standard Deduction

When individuals submit their yearly tax returns, they may utilize the standard deduction to lower their taxable income. It is important to understand that taxable income is your adjusted gross income (AGI) minus any itemized deductions or the standard deduction.

2022 Standard Deductions

The deduction set by the IRS for 2022 is as follows:

The increased standard deduction amount for an elderly or blind person is fixed at $1,400. If the person is single and does not have a surviving spouse, the sum rises to $1,750. The standard deduction for claiming a dependent is $1,150, or $400 plus the individual’s earned income (as long as it is less than $12,950).

Capital Gains

Capital gains tax rates are lower than regular income tax rates. However, they are subject to the taxpayer’s taxable income and filing status. Both the normal income tax and the alternative minimum tax have maximum adjusted capital gains rates.

For the 2022 tax year, your capital gains rate is 0% if your income does not exceed:

  • For married couples filing jointly, the tax is $83,350.
  • Married couples filing separately must pay $41,675.
  • $55,800 for the household’s head
  • $41,675 for single filers

The 15% rate will be applied to adjusted net capital gains in 2022 for:

  • Up to $517,200 in joint returns
  • Separate returns for married couples of up to $258,600
  • Returns to the head of the family of up to $488,500
  • Individual refunds of up to $459,750 are possible for a single person.

For income amounts over these limits, the appropriate capital gains tax is set at 20%.

Individual Tax Credits

Earned Income Tax Credit (EITC)

The maximum earned income tax credit (EITC) amount for taxpayers with self-reported income in the lowest income band, as well as the taxable income levels for its thresholds and ceilings, are adjusted for inflation. In 2022, the maximum credit for three or more children is $6,935. The credit phaseout starts at $26,260 of adjusted gross income for married couples filing jointly (or earned income, if higher).The credit balance is $59,187.

If the aggregate amount of investment income, such as interest, dividends, net capital gains, or other passive activities, exceeds $10,300 in 2022, no EITC is permitted.

President Biden’s American Rescue Plan, enacted on March 11, 2021, contains considerable tax relief for persons with self-reported earnings in the lowest income group. People without children may now claim the EITC at the age of 19, rather than 25, with the exception of select full-time students (students ages 19 to 24 with at least half a full-time course load are ineligible).The top age restriction of 65 is no longer in effect.

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The phaseout rate climbs to 15.3% for single filers, while the phaseout amount rises to $11,610. The EITC was also enhanced to $1,502 for childless families solely for the 2021 tax year.

Child Tax Credit: Special Rules for 2021 Only

The Child Tax Credit was modified under President Biden’s American Rescue Plan for 2021. It might cost up to $3,000 per kid (or $3,600 for children aged 6 and under). The eligibility age for children has also been raised to 17 years old (from 16).The maximum refundable part of the child credit for each kid under the age of 17 was set at $1,400. In 2021, the credit was entirely refundable for that amount. In 2022, the sum is $1,500.

From July through December 2021, the IRS was permitted to provide up to half of a qualified household’s credit as an advance payout, using the previous year’s tax return to assess eligibility.

Eligible families who did not receive any advance Child Tax Credit payments may claim the entire amount on their 2021 federal tax return. Families who got advance payments must submit a 2021 tax return and match the amount of the Child Tax Credit that they may legitimately claim on their 2021 tax return with the amount of the Child Tax Credit that they received in advance in 2021.

The credit is reduced to $2,000 per child if your modified adjusted gross income (MAGI) exceeds a certain limit. The limit for 2021 is:

  • married couples filing jointly: $150,000
  • $112,500 for household heads
  • $75,000 for single filers

Biden’s bill also eliminated the minimum income requirement for the Child Tax Credit. Previously, families earning less than $2,500 a year were ineligible and credits were calculated based on distance from that minimum at a rate of 15 cents per child for every dollar of income above $2,500.

The Child Tax Credit increase and monthly advance payments only apply through 2021. The option to get the credit as a lump payment was accessible by opting out on the IRS Child Tax Credit Update Portal, which is no longer available. (This money will be received all at once when 2022 taxes are submitted in the spring of 2023.) For tax years 2022 and after, the child tax credit will return to pre-2021 standards.

Qualified Adoption Expenses

For 2022, the credit for qualifying adoption expenditures and the additional credit for adopting a child with special needs total $14,890. The deduction from income for qualifying adoption expenditures paid or reimbursed via an employment plan will be raised to the same amount.

Lifetime Learning Credit

The maximum lifetime learning credit (LLC) of $2,000 per return for eligible educational costs for a taxpayer, spouse, or dependent is phased out in 2022 for taxpayers with MAGI of more than $80,000 ($160,000 for joint returns).

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Foreign Earned Income Exclusion

The IRS has set the overseas earned income exclusion at $112,000 for 2022.

Alternative Minimum Tax

The alternative minimum tax (AMT) applies to alternative minimum taxable income that exceeds an exemption threshold, such as ordinary taxable income with certain tax advantages added back.

The following are the alternative minimum tax exemption levels for 2022:

  • $118,100 for joint returns
  • Unmarried persons may earn $75,900.
  • $59,050 for married couples filing separate returns

These alternative minimum tax exemption levels will be phased down in 2022, beginning with:

  • Joint returns range from $1,079,800 to $1,552,200.
  • Unmarried persons might earn between $539,900 and $843,500.
  • Separate returns for married folks range from $539,900 to $776,100.

The alternative minimum tax rate is 28% on alternative minimum taxable income up to a limit of $206,100 (for 2022) for married couples and single people ($103,050 for married filing separately in 2022).

Increased Allowances: Fringe Benefits, Medical Spending Accounts, and Estates

For 2022, the monthly cap for qualifying transportation and qualified parking fringe benefits is $280.

For 2022, the maximum salary decrease for health flexible spending accounts (FSAs) contributions is $2,850. For 2022, the maximum carryover of leftover money for cafeteria plans is $570.

The following are the thresholds and ceilings for participants in medical savings accounts (MSAs):

  • For self-coverage in 2022, the cost ranges from $2,450 to $3,700, with a maximum out-of-pocket expense of $4,950.
  • For family coverage in 2022, the cost ranges from $4,950 to $7,400, with a maximum out-of-pocket payment of $9,050.

The estate tax exemption limit for a decedent dying in 2021 is set at $12.06 million in 2022. For 2022, the yearly gift tax deduction is $16,000.

Retirement Plans

The IRS also establishes contribution limits and phaseout ranges for retirement plans. Employee contributions to workplace retirement plans, such as 401(k)s, 403(b) plans, 457 plans, and the federal government’s Thrift Savings Plan, are exempt from income tax in 2021 and $20,500 in 2022. Employees over the age of 50 may make a catch-up contribution of $6,500 for both years. SIMPLE (Savings Incentive Match Plan for Employees) retirement accounts are limited to $13,500 in 2021 and $14,000 in 2022.

Individual Retirement Accounts (IRAs)

Individual retirement account (IRA) contributions are deductible up to $6,000 in both 2021 and 2022. People over the age of 50 may donate an extra $1,000 each year.

However, the phaseout thresholds for the deduction are raised. If a taxpayer or their spouse is enrolled in an employment retirement plan throughout the year, the deduction may be decreased or phased out until it is no longer available.

The phaseout ranges for 2021 are as follows:

  • If a person participates in an employment retirement plan, the deduction phaseout for adjusted gross income is $66,000-$76,000 for singles and heads of households, and $105,000-$125,000 for joint returns.
  • The phaseout varies from $198,000 to $208,000 for an IRA donor who is not an active member in another plan but whose spouse is an active contributor.
  • There is no change for a married active contributor filing a separate return, and the phaseout range remains $0 to $10,000.

The phaseout ranges for 2022 are as follows:

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  • If a person participates in an employer retirement plan, the deduction phaseout for adjusted gross income is $68,000-$78,000 for singles and heads of households, and $109,000-$129,000 for joint returns.
  • The phaseout varies from $204,000 to $214,000 for an IRA donor who is not an active member in another plan but whose spouse is an active contributor.
  • There is no change for a married active contributor filing a separate return, and the phaseout range remains $0 to $10,000.

If neither a taxpayer nor their spouse is protected by a job retirement plan, IRA phaseouts do not apply.

Roth IRAs

The Roth IRA contribution phaseout levels for 2022 are $129,000 to $144,000 for single taxpayers and heads of households, and $204,000 to $214,000 for joint returns. The Roth IRA phaseout for a married person filing a separate return stays between $0 and $10,000.

Saver’s Credit

Contributions to 401(k), 403(b), SIMPLE, SEP (Simplified Employee Pension), or some 457 plans, as well as regular and Roth IRAs, by low-income taxpayers, are eligible for a nonrefundable tax credit in addition to their exclusions or deductions.

Married taxpayers filing joint returns may receive a credit for up to $4,000 in contributions at a rate of:

  • 50% with AGI up to $41,000
  • 20% with AGI up to $44,000
  • 10% with AGI up to $68,000

In 2022, heads of families may claim a credit for up to $2,000 in contributions at the rate of:

  • 50% with AGI up to $30,750
  • 20% with AGI up to $33,000
  • 10% with AGI up to $51,000

For 2022, all other taxpayers are able to claim a credit for up to $2,000 in contributions at the rate of:

  • 50% with AGI up to $20,500
  • 20% with AGI up to $22,000
  • 10% with AGI up to $34,000

Frequently Asked Questions

What were the 2021 tax brackets?

The Internal Revenue Service (IRS) established seven federal tax brackets for tax year 2021: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The United States has a progressive federal tax structure, which means that those with the lowest incomes pay 20%, while those with the highest incomes pay 37%.

What are the 2022 tax brackets?

The IRS made no changes to the federal tax brackets for 2022 from those in 2021. There are still seven: 10%, 12%, 22%, 24%, 32%, 35%, and 37% in the top. However, the income levels for all tax categories will be raised in 2022 to reflect inflationary pressures. Thus, the amount of tax you will pay is determined by your income and how you file your taxes, such as single or married filing jointly.

How did standard deductions change for the 2022 tax year?

In 2022, the standard deduction will be increased. The IRS has established the following standard deduction amounts:

  • $12,950 for single filers
  • Married couples filing separately must pay $12,950.
  • $19,400 for household heads
  • For married couples filing jointly, the tax is $25,900.
  • $25,900 for surviving spouses

The Bottom Line

Every year, generally in November, the IRS reveals the rates and inflation changes that will effect federal taxes for the next tax year, such as tax brackets, basic deductions, tax credits, IRA regulations, and other items. It is important to be informed of any changes made by the IRS in order to submit your taxes correctly and prevent overpayment or underpayment.

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