Every year when people prepare for tax season, they’re usually made aware of changes. 2022 is not any different with changes from the IRS.
2021 saw major inflation rates, resulting in adjustments by the IRS.
While these changes won’t necessarily impact this year’s tax return, they will impact 2023.
Major changes the IRS made this year
Standard deductions given by the IRS
Standard deductions make it so taxpayers have a set amount of income that is not federally taxed.
The amount for 2022 has increased.
Couples will see an $800 increase, bringing their standard deduction up to $25,900 this year.
Single filers will see a $400 increase, bringing their standard deduction up to $12,950.
Those filing as head of household will see an increase of $600, bringing their standard deduction up to $19,400.
State taxes: Which 9 states have no income tax?
Federal tax brackets
Tax rates will remain the same at 10%, 12%, 22%, 24%, 32%, 35% and 37%.
In order to keep up with inflation, tax brackets are adjusted.
The following tax brackets are for federal income in 2022
Single filers
- 10% – on earnings $0 – $10,275
- 12% – on earnings $10,276 – $41,775
- 22% – on earnings $41,776 – $89,075
- 24% – on earnings $89,076 – $170,050
- 32% – on earnings $170,051 – $215,950
- 35% – on earnings $215,951 – $539,900
Tax Refund: $500 extra dollars in this state
Married filing jointly
- 10% – on earnings $0 – $20,550
- 12% – on earnings $20,551 – $83,550
- 22% – on earnings $83,551 – $178,150
- 24% – on earnings $178,151 – $340,100
- 32% – on earnings $340,101 – $431,900
EITC, or Earned Income Tax Credit
Low to moderate income working families benefit from this credit.
The EITC was brought to $6,935 after being raised $207.
What you end up getting as a credit depends on your income overall as well as how many kids you have.
IRS: Deadlines to be aware of ahead of challenging tax season
Contributions to your retirement accounts
When you put money into accounts like your 401k, you can decrease what you owe in taxes.
The amount you can contribute has risen for the year 2022.
The limit for contributing is now $20,500, up by $1,000.
Those over age 50 can contribute an addition $6,500 as a catch up contribution.
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