Friday, November 12, 2021

THIS JUST IN – IRS ISSUES NUMBERS FOR 2022

The IRS has issued Revenue Procedure 2021-45, which reported the inflation-adjusted numbers for tax rates and many deductions and credits for tax year 2022.

Here is some of what is new for 2022 -

 

THE STANDARD DEDUCTION

 

·            Single and Married Filing Separate = $12,950

·            Married Filing Joint/Qualifying Widow(er) = $25,900

·            Head of Household = $19,400


The Standard Deduction for a dependent is the greater of (1) $1,150, or (2) the sum of $400 and the individual's earned income (not to exceed $12,950).

 

The additional Standard Deduction amount for the age 65 or older or blind is $1,400 for married individuals and $1,750 for Single and Head of Household.

 

PERSONAL EXEMPTION AMOUNT

There is no longer a personal exemption deduction.  However, the amount of the gross income limitation for determining if a person is a qualifying relative is $4,400. 

HEALTH CARE FLEXIBLE SPENDING ARRANGEMENT

 

The maximum amount that an employee can contribute to an employer-sponsored “pre-tax” Flexible Spending Arrangement (FSA) for health care expenses is $2,850.  The maximum carryover amount is $570.

HEALTH SAVING ACCOUNTS AND HIGH DEDUCTIBLE HEATH PLANS (from a previous IRS release)

The Health Savings Account contribution limit is $3,650 for a self-only plan and $7,300 for a family plan.  The catch-up contribution for those age 55 or older is $1,000.  

The High Deductible Health Plan minimum deductible is $1,400 for a self-only plan and $2,800 for family coverage.

The High Deductible Health Plan maximum out of pocket is $7,050 for individuals and $14,100 for families.

FOREIGN EARNED INCOME EXCLUSION 

The foreign earned income exclusion is $112,000.

 

EDUCATOR EXPENSES

 

The adjustment to income for expenses paid by grade K-12 teachers, instructors, counselors, principals, and aides for books, supplies, computer hardware, software, and services, equipment, personal protective equipment, and supplementary materials is limited to $300, or $600 on joint returns if both spouse quality.

 

As usual, I am in the process of preparing a compilation of “What’s New for 2022” and will make it available for purchase when completed.

 

TTFN












 

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