2022 Key Tax Numbers

Tax Year: 2022

• Employees:
  • An employee's share of Social Security tax withheld from gross wages is 6.2% (the employee and employer each pay 50% of the total 12.4% rate).
  • The 2022 Social Security wage base is $147,000 (the maximum social security withholdings should not exceed $9,114).
  • The employees share of Medicare tax withheld from gross wages is 1.45% (the employer and employee each pay 50% of the total 2.9% rate).
• Self-employed:
  • On Schedule SE for 2022, the Self-employment tax rate is 15.3%, which equals 100% of the Social Security rate of 12.4% plus 100% of the Medicare tax rate of 2.9%.
  • For 2022, the 15.3% rate applies to earnings (both self-employment and wages from a job) up to $147,000. Only 92.35% of self-employment earnings are subject to the 15.3% rate. For example, if net profit on Schedule C is $150,000, only $138,525 would be subject to the 15.3% rate (.9235 x $150,0000). (For 2022, the .9235 rate is shown on Schedule SE, line 4a.)
  • Unlike the Social Security wage base, which is the maximum taxed for Social Security, there is no earnings limit for the Medicare tax; the 2.9% Medicare rate applies to 100% of gross earnings.
  • One-half of the self-employment tax is deductible. Enter the amount on Schedule 1 (Form 1040 or Form 1040-SR), Part II, Line 15. This is an above-the-line deduction, so you don't have to itemize your deductions to claim it.
• Additional 0.9% Medicare Tax on Earnings:
• High income taxpayers whose income exceeds a threshold, depending on their filing status, are subject to an additional 0.9% Medicare Tax. If you're married and file a joint return, you must combine your and your spouse's wages, other compensation (i.e. tips, taxable fringe benefits, etc.) and self-employment income to determine if the threshold is exceeded.
• If in 2022 you had only self-employment earnings and no wages, you figure your liability for the 0.9% tax in Part II of Form 8959, Additional Medicare Tax.
• If you had wages and tips or other taxable employee compensation treated as wages, but not earnings from self-employment, the 0.9% tax applies in Part I of Form 8959 to the excess wages over your filing threshold. For example, if your 2022 wages are $225,000 and you're single, the tax applies to $25,000, the excess wages over the $200,000 threshold, and a tax of $225 applies (.009 x $25,000).
• If you had wages and net earnings from self-employment in 2022, do the following:
  • first determine if the 0.9% tax applies to your wages in Part I of Form 8959,
  • then reduce your threshold amount by your wages to get a reduced threshold amount that is used to determine if the tax applies to the self-employment income.
• A net loss from self-employment does not offset wages.
• The 50% deduction for self-employment tax does not apply to the 0.9% Additional Medicare Tax.

Threshold Amounts for the Additional 0.9% Medicare tax 2022

Filing Status	Threshold
Married filing jointly	$250,000
Married filing separately	$125,000
Single	$200,000
Head of household	$200,000
Qualifying widow(er)	$200,000

• If an election was made in 2020 to defer the employer portion of Social Security taxes, which is part of self-employment tax, then 50% of the deferred amount must have been paid by December 31, 2022

Tax Year: 2022

You can no longer claim a personal exemption for yourself, your spouse or your dependents.

Tax Year: 2022

• Married filing Joint return: $25,900
• Qualifying widow/widower: $25,900
• Head of household: $19,400
• Single: $12,950
• Married filing separately: $12,950
• Dependent - minimum standard deduction: $1,150
• Additional Deduction if Age 65 or Older, or Blind.
  Note: If you turned 65 on January 1, 2023, you are considered to be 65 as of December 31, 2022 for purposes of claiming this deduction. The larger deduction for blindness is allowed regardless of age.
  • Married-per-spouse, filing jointly or separately:
    • $1,400 ($2,800 for age and blindness)
  • Qualifying widow/widower:
    • $1,400 ($2,800 for age and blindness)
  • Single or head of household:
    • $1,750 ($3,500 for age and blindness)

Tax Year: 2022

Taxable Income Threshold	0%	15%	20%
Married Filing Jointly	$1 - $83,350	$83,351 - $517,200	$517,201 and over
Surviving Spouse	$1 - $83,350	$83,351 - $517,200	$517,201 and over
Head of Household	$1 - $54,100	$54,101 - $488,500	$488,501 and over
Single	$1 - $41,675	$41,676 - $459,750	$459,751 and over
Married Filing Separately	$1 - $41,675	$41,676 - $258,600	$258,601 and over
Collectibles gain	maximum rate		28%
Unrecaptured Section 1250 gain on depreciated real estate	maximum rate		25%

Tax Year: 2022

• Business:
  • January 1 through June 30: 58.5 cents per mile
  • July 1 through December 31: 62.5 cents per mile
• Medical and moving for military personnel:
  • January 1 through June 30: 18 cents per mile
  • July 1 through December 31: 22 cents per mile
• NOTE: This deduction only applies to members of the U.S. Armed Forces on active duty who move pursuant to a military order and incident to a permanent change of station.
• Charitable volunteers: 14 cents per mile

Tax Year: 2022

• Free parking, transit passes and van pooling: $280 per month

Tax Year: 2022

Traditional IRAs:

• Traditional IRA contribution limit: $6,000
• Additional contribution if age 50 or older: $1,000
• Deduction phaseout for active plan participant:
  • Single or head of household: $68,000 - $78,000
  • Married filing jointly, two participants: $109,000 - $129,000
  • Married filing jointly, one participant:
    • Participant spouse: $109,000 - $129,000
    • Non-participant spouse: $204,000 - $214,000
    • Married filing separately, live together, either participates:
      • $0 - $10,000
  • Married filing separately, live apart all year:
    • Participant spouse: $68,000 - $78,000
    • Non-participant spouse: no phaseout

Roth IRAs:

• Roth IRA contribution limit: $6,000
• Additional contribution if age 50 or older: $1,000
• Roth IRA Contribution limit phaseout range:
  • Single, head of household: $129,000 - $144,000
  • Married filing separately, live apart all year: $129,000 - $144,000
  • Married filing jointly, or qualifying widow/widower: $204,000 - $214,000
  • Married filing separately, live together at any time: $0 - $10,000

Tax Year: 2022

• 401(k), 403(b), 457 plans: $20,500
• Salary-reduction SEP: $20,500
• SIMPLE IRA: $14,000
• Additional contribution if age 50 or older (catch-up contributions):
  • 401(k), 403(b), governmental 457 and SEP plans: $6,500
  • SIMPLE IRA: $3,000

Tax Year: 2022

• American Opportunity credit limit-per student: $2,500
• Lifetime Learning credit limit-per-taxpayer: $2,000
• Phaseout of American Opportunity credit:
  • Married filing jointly: $160,000 - $180,000
  • Single, head of household, or qualifying widow/widower: $80,000 - $90,000
• Phaseout of Lifetime Learning credit:
  • Married filing jointly: $160,000 - $180,000
  • Single, head of household, qualifying widow/widower: $80,000 - $90,000
• Student loan interest deduction limit: $2,500
  • Phaseout of deduction limit:
    • Married filing jointly: $145,000 - $175,000
    • Single, head of household, qualifying widow/widower: $70,000-$85,000
• Coverdell ESA limit: $2,000
  • Phaseout of limit:
    • Married filing jointly: $190,000 - $220,000
    • All others: $95,000 - $110,000
  • Tuition and fees Deduction No Longer Allowed Beginning 2021:
    • Before 2021, you didn't have to itemize deductions to deduct tuition and fees for up to $2,000 or $4,000 of qualifying higher education tuition and fees, subject to an income limitation. This deduction was repealed for years after 2020. However, you may be able to claim this deduction if you're amending or filing a tax return from 2019 or 2020.

Tax Year: 2022

• Limit on premium allowed as medical expense:
  • Age 40 or under: $450
  • Over 40 but not over 50: $850
  • Over 50 but not over 60: $1,690
  • Over 60 but not over 70: $4,520
  • Over 70: $5,640

Tax Year: 2022

For qualifying property placed in service in 2022, first-year expensing is allowed up to a limit of $1,080,000. The limit begins to phase out if the total cost of qualifying property exceeds $2,700,000.

Section 179 Deduction Phase-out:

If the cost of qualifying property placed in service in 2022 is more than $2,700,000, you reduce the $1,080,000 expensing limit dollar-for-dollar for each dollar the cost of qualifying property exceeds $2,700,000 (but not below zero).

For example, if you place machinery in service during 2022 costing $2,800,000, the deduction limit of $1,080,000 is reduced by $100,000 to $980,000, which is entered on Form 4562 in Part 1, line 5 (Dollar limitation for tax year).

If the cost of the property was $3,780,000 or more, no first-year expensing deduction would be allowed for 2022 because it would be completely phased out ($3,780,000 - $2,700,000 = $1,080,000 expensing limit).

2022 Bonus Depreciation (Section 168(k):

Bonus depreciation is an additional first-year depreciation allowance equal to a set percentage of the adjusted basis of eligible property. The percentage for bonus depreciation for 2022 is 100% (bonus depreciation is scheduled to drop starting 2023). Bonus depreciation is fully deductible for alternative minimum tax purposes; no adjustment is required.

Bonus depreciation is also referred to as a "Section 168(k) allowance" and a "special depreciation allowance".

The Tax Cuts and Jobs Act increased the bonus depreciation percentage from 50% to 100% for qualified property acquired and placed in service after September 27, 2017, and before January 1, 2023.

This law change...

• generally, applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances and furniture generally qualify, and.
• Adds film, television, live theatrical productions, and some used qualified property as types of property that may be eligible.

You may elect out of the additional first-year depreciation by attaching a statement to their and identifying the property's class that.

Tax Year: 2022

For 2022, only taxpayers who itemize deductions on Schedule A (Form 1040 or 1040-SR) may deduct charitable contributions. The rules that applied in 2021 under the Consolidated Appropriations Act of 2021 (CAA) which passed in December 2020 expired. Under the CAA, taxpayers claiming the standard deduction on their 2021 tax return could deduct contributions up to $300 ($600 if married filing jointly) made in cash to qualified charities.

Tax Year: 2022

The chid tax credit for 2022 is $2,000 per qualifying child (the same amount as in pre-2021 law). The credit may only be claimed for a qualifying child who is under age 17 at the end of the year for those with modified adjusted gross income (MAGI) below certain limits. The credit begins to phase out when MAGI exceeds $400,000 if married filing jointly or $200,000 for all others. You must complete Schedule 8812 to determine the amount of the credit.

The tentative credit, figured on Schedule 8812, is compared with your tax liability (regular tax plus alternative minimum tax minus specified credits); the smaller amount is the allowable child tax credit. If your child tax credit is limited to your tax liability, part or all of the excess credit may be refundable as an additional credit (ACTC) if your earned income exceeds $2,500 or you have three or more children.

To claim the child tax credit or the additional child tax credit:

1. You (and your spouse if filing jointly) must have a valid Social Security Number (SSN) by the due date for filing your 2022 return (plus extensions).
2. If you are not eligible for a SSN, you must have an Individual Taxpayer Identification Number (ITIN) by the return due date (with extensions). If the SSN or ITIN was not issued by the due date (with extensions), you cannot claim the child tax credit or the ACTC on your original return or on an amended return if you get the number later.
3. Each qualifying child must have a SSN that is valid for employment issued before the due date of your return (with extensions). If the required SSN is not obtained by the due date (with extensions) you cannot claim the child tax credit or ACTC for that child, either on your original return or on an amended return if you get the number later. However, if a qualifying child does not have the required SSN by your filing due date, you may be able to treat that child as your dependent for purposes of claiming the credit for other dependents.

Tax Year: 2022

For 2022 maximum EIC amount is $3,733 for one qualifying child, $6,164 for two qualifying children, $6,935 for three or more qualifying children, and $560 for taxpayers who have no qualifying child. The phaseout ranges for the EIC have been adjusted for inflation. The excessive investment income limit is $10,300.