New IRS 2022 income tax brackets and phase-outs for education tax breaks

Each year, the Internal Revenue Service (IRS) makes inflationary rounding adjustments to federal tax brackets and income phase-outs for various tax deductions and tax credits.

Although IRS Publication 17, Your federal income tax, and IRS Publication 970, Tax benefits for education, will not be updated until 2022, the IRS typically releases the updated figures in a tax proceeding in late October or early November.

Tax brackets

The tax rate tables include seven tax brackets, with the following income brackets.

The Kiddie Tax thresholds are increased to $ 1,150 and $ 2,300.

The refundable portion of the child tax credit has increased to $ 1,500.

The maximum earned income tax credit is $ 560 for no child, $ 3,733 for one child, $ 6,164 for two children and $ 6,935 for three or more children. As of 2022, the earned income tax credit is not allowed if the total amount of investment income is greater than $ 10,300.

The estate and trust tax rates have four brackets.

The standard deduction has increased slightly.

The Alternative Minimum Tax (AMT) exemption is $ 75,900 for single filers, $ 118,100 for joint filing, $ 59,050 for married filing separately, and $ 26,500 for estates and trusts.

The income limit for certain capital gains tax rates has been increased.

Income elimination

There are several income phase-outs for education tax benefits.

The deduction for tuition and fees has been permanently repealed.

The income phase-outs for the U.S. Opportunities Tax Credit and the Lifetime Learning Tax Credit are not adjusted for inflation.

Income cuts for Coverdell Education Savings Accounts are not adjusted for inflation.

Income exclusions

Exclusion of annual tax on donations: $ 16,000

Exclusion of inheritance tax and life gifts: $ 12.06 million

Exclusion of foreign income: $ 112,000

Pension plan contribution limits

The Roth IRA contribution limits remain at $ 6,000, with an additional catch-up contribution limit of $ 1,000 for workers aged 50 and over. The phase-out of contribution income is $ 129,000 to $ 144,000 (single and head of household), $ 204,000 to $ 214,000 (married declaring jointly) and $ 0 to $ 10,000 (married declaring separately).

Contribution limits for the 401 (k), 403 (b) and 457 plans have been increased to $ 20,050, with an additional catch-up contribution limit of $ 6,500 for workers aged 50 and over. The catch-up contribution limit has not changed.

The contribution limit for the SIMPLE pension plans has increased to $ 14,000.

The income limit for the savings loan is $ 34,000 (single and married declaration separately), $ 68,000 (joint declaration) and $ 51,000 (head of household).