Tax Changes For 2022

Here is a summary of tax changes for 2022:

• The standard deduction for married filing jointly will be $25,900; single & married filing separately (MFJ) = $12,950, head of household = $19,400.
• Tax rates: 10 percent for single individuals with income $10,275 or less ($20,550 for MFJ). 12 percent for income over $10,275 ($20,500 for MFJ). 22 percent for income over $41,775 ($83,550 MFJ); 24 percent for income over $89,075 ($178,150 MFJ); 32 percent for income over $170,050 ($340,100 MFJ); 35 percent, for income over $215,950 ($431,900 MFJ); 37 percent for individual single taxpayers with income greater than $539,900 ($647,850 for MFJ).
• The personal exemption for tax year 2021 remains at 0.
• There is no limitation on itemized deductions.
• The max Earned Income Tax Credit is $6,935 for taxpayers with three + qualifying children.
• The limitation for flexible spending arrangements remains $2,850. For cafeteria plans the maximum carryover is $570.
• Self-only coverage in a Medical Savings Account: the minimum plan deductible must be no less than $2,450; no more than $3,700. For self-only coverage the maximum out-of-pocket is $4,950. The family coverage floor for the annual deductible is $4,950, no more than $7,400 and the out-of-pocket expense limit is $9,050.
• The foreign earned income exclusion is $112,000.
• The annual exclusion for gifts increased from $15,000 to $16,000
• The penalty for failure to file a tax return within 60 days of the due date is $210 or 100% of the tax due, whichever is less.