Today, the IRS released Revenue Procedure 2021-45 which details annual inflation adjustments for various tax thresholds. Below are some key changes for tax year 2022:
- The standard deduction for married couples is increasing $800 to $25,900
- The standard deduction for single taxpayers is increasing $400 to $12,950
- The standard deduction for head of household taxpayers is increasing $600 to $19,400
- The tax brackets for marginal rates are increasing slightly, the lowest bracket for single filers increases $325 and the highest bracket for married couples increases $19,550
- The maximum an employee can contribute to an FSA (flexible spending account) is $2,850, up $100
- The estate exclusion increases $360,000, up to $12,060,000
- The annual gift exclusion increases $1,000 to $16,000
For other changes, take a look at IRS News Release 2021-219 which includes additional details.
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