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Your New 2022 Tax Rates & More
The Internal Revenue Service recently announced their annual inflation adjustments for the tax year 2022. Higher recent inflation means that some of these numbers are up by a greater degree compared to recent years. However, there is one big caveat to these 2022 numbers: Democrats are still trying to pass further social safety net and climate bills in the final months of 2021 which could have tax consequences as early as 2022. That being said, here is what we know today:
Married Filing Joint 2022 Tax Brackets
| Tax rate | Taxable income bracket | Taxes owed |
| 10% | $0 to $20,500 | 10% of taxable income |
| 12% | $20,501 to $83,550 | 12% of the amount over $20,500 |
| 22% | $83,551 to $178,150 | 22% of the amount over $83,550 |
| 24% | $178,151 to $340,100 | 24% of the amount over $178,150 |
| 32% | $340,101 to $431,900 | 32% of the amount over $340,100 |
| 35% | $431,901 to $647,850 | 35% of the amount over $431,900 |
| 37% | $647,851 or more | 37% of the amount over $647,850 |
Single Filer2022 Tax Brackets
| Tax rate | Taxable income bracket | Tax owed |
| 10% | $0 to $10,275 | 10% of taxable income |
| 12% | $10,276 to $41,775 | 12% of the amount over $10,275 |
| 22% | $41,776 to $89,075 | 22% of the amount over $41,775 |
| 24% | $89,076 to $170,050 | 24% of the amount over $89,075 |
| 32% | $170,051 to $215,950 | 32% of the amount over $215,950 |
| 35% | $215,951 to $539,900 | 35% of the amount over $215,950 |
| 37% | $539,901 or more | 37% of the amount over $539,900 |
Other Notable Items (Subject to change based on Legislation Changes)
- Standard Deduction amounts are now $12,950 for Single, and $25,900 for Married Filing Joint
- Capital Gains rates are remaining at either 0%, 15%, or 20% depending on taxable income levels
- Federal Estate Tax Exemption moves to $12.06M per person or $24.12M for a married couple
- Annual Gift Tax exclusion changes to $16,000 (was previously $15,000)
Retirement Account Proposed Changes
- Salary Deferral Limit for workplace retirement plans goes from $19,500 to $20,500
- Overall retirement plan contribution limit (including employer contributions) is now $61,000 or $67,500 if over age 50
- SIMPLE IRA contribution limits jump to $14,000 per year
- Traditional IRA and Roth IRA contribution limits remain at $6,000 or $7,000 if over age 50
As stated, this information is subject to change depending on the final bills to come out of Washington before year-end. Regardless the key takeaway is that due to some high inflation, we currently have some meaningful expected changes that will be made to both taxable income brackets and retirement savings thresholds.