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December 30, 2021 | Posted in:

An Overview of Tax Changes for 2022

 

Here’s a quick review of some of the tax changes you’ll see from 2021 to 2022 as a result of inflation adjustments and new tax laws.

Tax Provision

2021

2022

+/-

Business equipment Sec. 179 expensing deduction $1,050,000 $1,080,000 +$30,000
Total purchase limit for full Sec. 179 expensing deduction $2,620,000 $2,700,000 +$80,000
Standard mileage rate: business 56¢ per mile 58.5¢ per mile +2.5¢
Standard mileage rate: medical/moving 16¢ per mile 18¢ per mile +2.0¢
Mileage rate: charitable activity 14¢ per mile 14¢ per mile nc
Maximum wages subject to social security tax $142,800 $147,000 +$4,200

Social security earnings limit

  – Under full retirement age $18,960 $19,560 +$600
  – Full retirement age No limit No limit nc
Top estate tax rate 40% 40% nc
Estate tax exemption $11,700,000 $12,600,000 +$900,000
Annual gift tax exclusion $15,000 $16,000 +$1,000

Alternative minimum tax exemption

  – Single $73,600 $75,900 +$2,300
  – Married, joint $114,600 $118,100 +$3,500
  – Married, separate $57,300 $59,050 +$1,750

Maximum retirement plan contributions

  – IRA for those under age 50 $6,000 $6,000 nc
  – IRA for those 50 and over $7,000 $7,000 nc
  – SIMPLE plan for those under age 50 $13,500 $14,000 +$500
  – SIMPLE plan for those 50 and over $16,500 $17,000 +$500
  – 401(k) plan for those under age 50 $19,500 $20,500 +$1.000
  – 401(k) plan for those 50 and over $26,000 $27,000 +$1.000
HSA contribution limits
  – Self only $3,600 $3,650 +$50
  – Family $7,200 $7,300 +$100
  – Additional for 55 & older $1,000 $1,000 nc

Miscellaneous Updates

“Kiddie tax” threshold $2,200 $2,300 +$100
“Nanny tax” threshold $2,200 $2,400 +$200
Education savings account contribution (Coverdell) $2,000 $2,000 nc
American opportunity (Hope) credit limit $2,500 $2,500 nc
Education loan interest deduction $2,500 $2,500 nc
Personal exemption (suspended through 2025) Suspended Suspended na

FICA & self-employment tax

Taxable wages for Social Security/Medicare Up to $142,800 Up to $147,000 +$4,200

Social Security/Medicare tax rate

  – Employees 7.65% 7.65% nc
  – Employers 7.65% 7.65% nc
  – Self-employed 15.3% 15.3% nc

Standard deduction

  – Single $12,550 $12,950 +$400
  – Joint returns & surviving spouses $25,100 $25,900 +$800
  – Married filing separately $12,550 $12,950 +$400
  – Head of household $18,800 $19,400 +$600
  – Additional for elderly or blind (married) $1,350 $1,400 +$50
  – Additional for elderly or blind (single) $1,700 $1,750 +$50

 

Additional Tax Planning Resources for 2022

Visit our Publications page to download Alloy Silverstein’s 2022 Payroll Tax Alert for small businesses and our 2021-2022 Tax Planning Guide.

Author:

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