IRS increases 2022 standard deduction for inflation relief

An IRS 1040 Form, US Individual Income Tax Return for 2017. (Associated Press)

It notified the tax authorities its tax inflation adjustment for 2022 this week, KTLA sister station WKBN reported.

The good news is, the income thresholds are getting a boost. The standard deduction for married couples applying jointly for the fiscal year 2022 rises to $ 25,900, an increase of $ 800 from the previous year. For single taxpayers and married applicants separately, the standard deduction will increase to $ 12,950 for 2022, an increase of $ 400, and for household heads, the standard deduction will be $ 19,400 for the 2022 tax year, up $ 600.

The tax rates for tax breaks and the Jobs Act of 2017 will not be changed. The highest rate remains 37% for individual single taxpayers with incomes above $ 539,900 ($ 647,850 for married couples applying jointly). The lowest is 10% for single incomes with an income of $ 10,275 or less ($ 20,550 for married couples applying jointly).

For the 2022 tax year, the amount individuals can contribute to their 401 (k) plans in 2022 has increased to $ 20,500, up from $ 19,500.

Other changes that will only apply to reports submitted in 2023 for the tax year 2022 include:

  • The alternative minimum tax exemption amount for the tax year 2022 is $ 75,900 and begins to phase out at $ 539,900 ($ 118,100 for married couples applying jointly, for whom the exemption begins to phase out at $ 1,079,800). The 2021 exemption amount was $ 73,600 and began to phase out at $ 523,600 ($ 114,600 for married couples applying jointly, for whom the exemption began to phase out to $ 1,047,200).
  • The 2022 tax year’s maximum income tax deduction is $ 6,935 for qualified taxpayers who have three or more qualified children, up from $ 6,728 for the 2021. tax year.
  • For the 2022 tax year, the monthly limit for the qualified transportation fringe benefit and the monthly limit for qualified parking will increase to $ 280.
  • For the taxable years beginning in 2022, the dollar limit for employee pay cuts for contributions to health-flexible spending schemes rises to $ 2,850. For cafeteria plans that allow the carry-over of unused amounts, the maximum carry-over amount is $ 570, an increase of $ 20 from taxable years beginning in 2021.
  • For fiscal year 2022, participants who only have coverage for themselves in a medical savings account, the plan must have an annual deductible of no less than $ 2,450, an increase of $ 50 from fiscal year 2021; but not more than $ 3,700, an increase of $ 100 from the tax year 2021. For self-coverage alone, the maximum expense amount is $ 4,950, an increase of $ 150 from 2021. For the 2022 tax year, for family coverage, the annual deductible is not less than $ 4,950, up from $ 4,800 in 2021; however, the deductible may not exceed $ 7,400, which is an increase of $ 250 from the tax year 2021. For family coverage, the deductible is $ 9,050 for the 2022 tax year, an increase of $ 300 from the 2021 tax year.
  • The modified adjusted gross income amount used by joint applicants to determine the reduction in the lifetime learning credit in ยง 25A (d) (2) is not adjusted for inflation for taxable years beginning after 31 December 2020. Lifetime Learning Credit is phased out for taxpayers with adjusted adjusted gross income of over $ 80,000 ($ 160,000 for joint returns).
  • For the 2022 tax year, the exclusion of foreign labor income is $ 112,000 up from $ 108,700 for the 2021 tax year.
  • Estates who die during 2022 have a basic foreclosure amount of $ 12,060,000, up from a total of $ 11,700,000 for estates who died in 2021.
  • The annual exclusion for gifts increases to $ 16,000 for the calendar year 2022, up from $ 15,000 for the calendar year 2021.
  • The maximum credit allowed for adoptions for the fiscal year 2022 is the amount of eligible adoption expenses up to $ 14,890, up from $ 14,440 for 2021.

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