2022 Tax Law Changes
Annual Gift Tax Exclusion Amount increases to $16,000 per donor per donee
Estate Tax (Death Tax) Exemption Amount increases to $12,060,00.00
Child Tax Credit reverts back to 2020 and prior rules. The last advanced child tax credit checks the IRS sent to taxpayers in the last half 0f 2021 were issued on January 15, 2022. There will be no more advanced child tax credit checks. The credit drops back to $2,000 per child under 17 years of age. The credit is no longer refundable.
Meals purchased for business purposes at a restaurant that are consumed in the restaurant or at a taxpayer’s place of business that are not lavish in nature continue to be 100% deductible in 2022.
Starting with tax year 2022, you will no longer be able to deduct charitable contributions unless you itemize deductions instead of taking the standard deduction. The last 2 years, taxpayers could claim up to a $300 charitable deduction on their 1040 tax returns if they did not itemize their deductions.
Standard deductions increase for 2022 to $25,900 for married couples filing joint (plus $1,400 for each spouse who is 65 years of age or older). Single taxpayers receive a standard deduction totaling $12,950, $14,700 if 65 or older. Head of household filers receive a standard deduction totaling $19,400, $21,150 if 65 or older.
Adoption tax credit increases to $14,890 on qualified adoption expenses.
The maximum for Social Security Wage/Income withholdings is $147,000.
Maximum 401k contribution is $20,500 (catch up for those 50 and older is additional $6,500. Same applies to 403b and 457 plans.
Maximum SIMPLE contributions increases to $14,000 plus additional $3,000 for individuals 50 and older.
Traditional IRA and Roth IRA contributions stay level at $6,000 and $1,000 catch up for individuals 50 and older.
Roth IRA phase outs increase starting at AGI $204,000 and capping out at $214,000 for couples and $129,000 to $144,000 for single filers.
IRA phaseouts apply at AGI $109,000 to $129,000 for couples and $68,000 to $78,000 for single filers.
Teachers can deduction $300 in school supplies.
Health Savings Account contributions increase to $3,650 for self and $7,300 for family. Individuals who are 55 or older can contribute an additional $1,000 to their HSA accounts.
Qualified Business Income (QBI) deductions for pass-through entities and self-employed Schedule C filers income thresholds increase, phaseouts beginning with Taxable Incomes of $340,101 for joint filers and $175,051 for all other filers.
