Main tax changes for 2022

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EVERY year typically brings a number of tax changes – and 2022 is no different.

Below, we summarize the major changes and inflation adjustments by the IRS that will affect the tax return you file in 2023.

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Taxpayers can expect a number of tax filing changes in 2023

Modification of standard deductions

The standard deduction ensures that all taxpayers have at least some income that is not subject to federal income tax.

And for 2022, this amount has increased.

According to the IRS, the standard deduction for couples will increase to $25,900 in 2022, up from $800 in 2021.

For single taxpayers and married individuals filing separately, the standard deduction has increased to $12,950. This is an increase of $400.

For heads of families, the standard deduction will be $19,400. This deduction has also increased by $600.

New federal tax brackets

Tax rates will not change. For 2022, they are still set at 10%, 12%, 22%, 24%, 32%, 35% and 37%.

However, the tax brackets have been adjusted to take inflation into account. We’ve listed them for 2021 and 2022 below.

2022 Federal Income Tax Brackets

Single individuals

  • 10% – on income from $0 to $10,275
  • 12% – on income $10,276 – $41,775
  • 22% – on income $41,776 – $89,075
  • 24% – on income $89,076 – $170,050
  • 32% – on income $170,051 – $215,950
  • 35% – on income $215,951 – $539,900

Married filing jointly

  • 10% – on income from $0 to $20,550
  • 12% – on income $20,551 – $83,550
  • 22% – on income $83,551 – $178,150
  • 24% – on income $178,151 – $340,100
  • 32% – on income $340,101 – $431,900

2021 Federal Income Tax Brackets

Single individuals

  • 10% – up to $9,950
  • 12% – $9,951 to $40,525
  • 22% – $40,526 to $86,375
  • 24% – $86,376 to $164,925
  • 32% – $164,926 to $209,425
  • 35% – $209,426 to $523,600
  • 37% – $523,601 or more

Married filing jointly

  • 10% – Up to $19,900
  • 12% – $19,901 to $81,050
  • 22% – $81,051 to $172,750
  • 24% – $172,751 to $329,850
  • 32% – $329,851 to $418,850
  • 35% – $418,851 to $628,300
  • 37% – $628,301 or more

Earned income tax credit in 2022

The Working Income Tax Credit (EITC) is intended to provide low-to-middle income workers and families with tax relief.

For 2022, the maximum EITC amount is $6,935. This is an increase of $207 over 2021.

However, the tax credit you receive depends on your income, your filing status and the number of children you have.

Retirement account contributions

Contributing to a 401k can significantly lower your tax bill, and the amount you can save has increased for 2022.

These accounts help you save for your retirement.

In 2022, the IRS raised the contribution limit for a 401k to $20,500 – up from $1,000.

At the same time, workers over 50 are entitled to an additional catch-up contribution of $6,500.

The Sun also explains when tax refunds will come out in 2022 and five ways to boost your tax refund.

Plus, we show you some great methods that can help clear your debt.

How the Child Tax Credit Boost Could Happen to Parents in 2022

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