We made it, and December is finally here. It’s time for wintry weather … and making year-end tax preparations. To help you prepare, we’ve outlined some of the tax inflation adjustments for the tax year 2022.

Standard Deductions

The standard deduction for married couples filing jointly for the tax year 2022 rises to $25,900 — up $800 from the prior year. For single taxpayers and married individuals filing separately, it rises to $12,950 (up $400). For heads of household, the amount is $19,400 (up $600).

Personal Exemptions

The personal exemption for the tax year 2022 remains at $0 — the same as 2021. This elimination is a provision of the Tax Cuts and Jobs Act.

Income Tax Rates

In 2022, the top tax rate of 37% affects individuals whose income exceeds $539,900 (or $647,850 for married filing jointly). The marginal tax brackets for 2022 are: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

Long-Term Capital Gains

For 2022, long-term gains and qualified dividends are taxed at 0%, 15%, or 20% — same as 2021. But thresholds no longer align directly with standard income brackets.

Child Tax Credit & Other Dependent Credit

In 2022, the child tax credit returns to $2,000 per qualifying child under age 17. The refundable portion is $1,500.

Earned Income Tax Credit (EITC)

For 2022, the maximum EITC for low- and moderate-income workers increased to $6,935. For filers with no qualifying children, the maximum credit is $560.

While this covers key tax changes for 2022, legislation can change. If you’d like help reviewing your tax plan or preparing for the upcoming season, contact Grants Pass Tax Service today.