What You Need to Know About 2022 Personal Income Taxes
| AMT Limits for 2022 | ||
|---|---|---|
| 2022 Exemption | 2022 Phaseout | |
| Single | $75,900 | $539,900 |
| Heads of Family | $75,900 | $539,900 |
| Married Submitting Collectively | $118,100 | $1,079,800 |
5 states—California, Colorado, Connecticut, Iowa, and Minnesota—have an alternate minimal tax (AMT) of their particular person earnings tax codes.
Charitable Contributions
The CARES Act permits a $300 ($600 for those who’re married submitting collectively) above-the-line deduction for money contributions to qualifying charities, even for those who took the usual deduction whenever you filed in 2021. Moreover, the legislation lifts the 60% of the AGI limitation on money contributions for individuals who itemize: You possibly can deduct donations for as much as 100% of your AGI. Notice: Donations to donor-advised funds and supporting organizations don’t qualify.
The 100% of AGI restrict on money contributions shouldn’t be computerized. You could elect to take the brand new restrict; in any other case, the standard (decrease) restrict will apply. You may make your election on Type 1040 or Type 1040-SR.
401(ok) Plan Contribution Limits
The contribution restrict for employer retirement plans similar to 401(ok)s, 403(b)s, most 457 plans, and the federal authorities’s thrift financial savings plan (TSP) is $20,500 for 2022.
The catch-up contribution restrict for workers ages 50 or older is $6,500 for 2022. The catch-up restrict applies to the next plans:
For SIMPLE retirement accounts, the contribution restrict is $14,000 for 2022, and a $3,000 catch-up restrict applies to contributors age 50 and up for each years.
IRA Contribution Limits
The annual contribution restrict for conventional IRAs and Roth IRAs stays unchanged at $6,000 for 2022. There’s an extra catch-up contribution of $1,000 for these over 50.
Taxpayers can deduct contributions to a conventional IRA in the event that they meet sure situations. Throughout the yr, if both the taxpayer or their partner was coated by a retirement plan at work, the deduction could also be lowered or phased out. If neither the taxpayer nor their partner is roofed by an employer-sponsored retirement plan, the phase-outs of the deduction don’t apply.
Part-out ranges for 2022 are as follows:
- For single taxpayers coated by a office retirement plan, the phase-out vary is $68,000 to $78,000.
- For married submitting collectively, when the partner making the IRA contribution is roofed by a office retirement plan, the phase-out vary is $109,000 to $129,000.
- For an IRA contributor who shouldn’t be coated by a office retirement plan and is married to somebody who is roofed, the deduction is phased out if the couple’s earnings is between $204,000 to $214,000.
- For a married particular person submitting a separate return who is roofed by a office retirement plan, the phase-out vary shouldn’t be topic to an annual cost-of-living adjustment and stays $0 to $10,000 in 2022.
Roth IRA contributions should not deductible. As well as, there are earnings limitations on the quantity you may contribute to a Roth IRA. The earnings phase-out vary for taxpayers making contributions to a Roth IRA is $129,000 to $143,000 for singles and heads of family in 2022. For married {couples} submitting collectively, the earnings phase-out vary is $204,000 to $214,000.
The Saver’s Credit score
Individuals with low-to-moderate incomes could qualify for the saver’s credit score, a dollar-for-dollar discount of the taxes you owe. The credit score is accessible to individuals who contribute to an IRA, 401(ok), or every other certified retirement account—offered their AGI falls inside particular parameters.
For 2022, the earnings restrict for the saver’s credit score (additionally known as the retirement financial savings contributions credit score) is $68,000 for married {couples} submitting collectively, $51,000 for heads of family, and $34,000 for singles and married people submitting individually.
Required Minimal Distributions (RMDs)
Required minimal distributions (RMDs) for IRAs and outlined contribution plans, similar to revenue sharing and 401(ok) plans, had been waived for 2020. This included your first RMD for those who reached age 70½ throughout 2019.
Nonetheless, RMDs are again for 2022 (and past). You could begin taking withdrawals out of your IRA, SIMPLE IRA, SEP IRA, and retirement plan accounts by April 1, following the yr you flip 72.
Roth IRAs haven’t any required minimal distributions throughout the account proprietor’s lifetime. In case you do not want the cash, you may go away it alone and let the account develop tax-free to your heirs.
Earned Earnings Tax Credit score
The earned earnings tax credit score (EITC) is a refundable tax credit score that helps lower-income taxpayers cut back the quantity of tax owed on a dollar-for-dollar foundation. As a refundable tax credit score, taxpayers could also be eligible for a refund even when they haven’t any tax legal responsibility for the yr. Listed here are the EITC AGI limits and most credit score quantities for 2022:
The earnings limits and most credit do not change a lot for 2022—except you do not have kids, during which case you may have a more durable time qualifying (and get a smaller credit score for those who do):
| EITC for 2022 | |||
|---|---|---|---|
| Dependents | Single or Head of Family | Married Submitting Collectively | Most EITC |
| $16,480 | $22,610 | $560 | |
| 1 | $43,492 | $49,622 | $3,733 |
| 2 | $49,399 | $55,529 | $6,164 |
| 3 | $53,057 | $59,187 | $6,935 |
HSA Contribution Limits
The greenback restrict for worker wage reductions for contributions to a well being versatile spending account (FSA) is $2,850 for 2022.
For tax yr 2022, individuals who have self-only protection in a medical financial savings account (MSA) will need to have an annual deductible that is between $2,450 and $3,700. The utmost out-of-pocket expense for self-only protection is $4,950.
The annual deductible for contributors with household protection have to be between $4,950 and $7,400 for 2022. For household protection, the out-of-pocket expense restrict is $9,050.
Property Tax Exemption and Annual Reward Exclusion
Estates of people that die throughout the tax tear have a fundamental property tax exemption quantity of $12.06 million in 2022.
The annual exclusion for items is $16,000 for 2022.
What Is the Deadline for Submitting My 2022 Tax Return?
Your 2022tax return is due Monday, April 18, 2023. You may get an computerized six-month extension by submitting Type 4868, Utility for Computerized Extension of Time to File U.S. Particular person Earnings Tax Return.
What Is the Customary Deduction for 2022?
Taxpayers can select the usual deduction or itemize their deductions on Type 1040 Schedule A. The usual deductions for 2022 are:
- $12,950 for single and married submitting individually filers
- $19,400for heads of family
- $25,900 for married submitting collectively taxpayers and surviving spouses
What Is the Property Tax Exemption for 2022?
Most estates are too small to set off the federal property tax, which applies provided that the property of the decedent’s property are value $12.06 million or extra for 2022. Notice that a couple of dozen states additionally levy an property tax.
Ought to I Rent a Tax Preparer or Use Tax Software program?
A slight majority of individuals within the U.S. pay a tax preparer to file their returns. Nonetheless, tax software program (e.g., TurboTax) has made it simpler for folks to organize and file their very own returns. The choice can come all the way down to price: Tax software program is mostly cheaper than hiring a tax professional. Nonetheless, you must also take into account the complexity of your return (go the professional route for those who personal a enterprise, had a serious life occasion, or need to itemize), your tax proficiency, and your schedule. On the whole, you may lower your expenses however not time for those who put together your personal return. In case you go along with a tax professional, you may usually save time however not cash. After all, an skilled tax preparer could prevent more cash than you spend on their companies, in order that must be taken into consideration, too.
The Backside Line
IRS inflation changes intend to maintain federal taxes consistent with inflation, so it pays to know the most recent figures. It is also useful to maintain tabs on latest tax legislation adjustments—even these unrelated to inflation. Understanding the most recent info might help you propose for the 2022 tax yr and past.
Notice to Hurricane Ida Victims
The IRS usually extends tax submitting and cost deadlines for victims of main storms and different disasters. Seek the advice of IRS catastrophe reduction bulletins to find out your eligibility.
