On November 10, 2021, the Internal Revenue Service posted over 60 tax provisions of annual inflation adjustments for the 2022 tax year. Below are the key adjustments to pay close attention to and keep in mind.
- Standard deductions in 2022:
- Filing Status
- Single – $12,950, up from $12,550 in 2021
- Married Filing Separately – $12,950, up from $12,550 in 2021
- Head of Household – $19,400, up from $18,600 in 2021
- Married Filing Jointly – $25,900, up from $25,100 in 2021
- Filing Status
- Itemized deductions in 2022:
- No limitations on itemized deductions
- Alternative Minimum Tax Exemption in 2022:
- Exemption by Filing Status
- Single, Head of Household, or Married Filing Separately – $75,900
- Exemption starts to phase out when AMT income is $539,900
- Married Filing Jointly – $118,100
- Exemption starts to phase out when AMT income is $1,079,800
- Single, Head of Household, or Married Filing Separately – $75,900
- Exemption by Filing Status
- Basic Exclusion amount for Estates of Decedents who die during 2022 is $12,060,000
- Increase of $360,000 from 2021
- Annual Gift Exclusion for calendar year 2022 is $16,000
- Increase of $1,000 from 2021
- Retirement Contribution limits for Employees in:
- 401(k), 403(b), most 457 plans, and the Thrift Savings Plan is $20,500
- Increase of $1,000 from 2021
- SIMPLE plan limits for individuals is $14,000
- Increase of $500 from 2021
- 401(k), 403(b), most 457 plans, and the Thrift Savings Plan is $20,500
- Unchanged Retirement Contribution limits for Employees:
- IRA contributions stay the same at $6,000
- IRA Catch-up contribution limit for individuals 50 years or older, is not subject to an annual cost-of-living adjustment and remains at $1,000
- Catch-up contribution limit for employees 50 years or older, in 401(k), 403(b), most 457 plans, and the Thrift Savings Plan stays the same at $6,500.