INDIVIDUAL INCOME TAX PLANNING
Adoption Credit
Adoption credit | 2021 | 2022 |
Maximum credit | $14,440 | $14,890 |
Phaseout threshold amount | $216,660 | $223,410 |
Completed phaseout amount after | $256,660 | $263,410 |
Alternative Minimum Tax (AMT)
Maximum AMT exemption amount | 2021 | 2022 |
Married filing jointly or surviving spouse | $114,600 | $118,100 |
Single or head of household | $73,600 | $75,900 |
Married filing separately | $57,300 | $59,050 |
AMT income exemption phaseout threshold | 2021 | 2022 |
Married filing jointly or surviving spouse | $1,047,200 | $1,079,800 |
Single or head of household | $523,600 | $539,900 |
Married filing separately | $523,600 | $539,900 |
AMT tax rate (26% rate applies to AMTI at or below amount; 28% applies to AMTI above amount) | 2021 | 2022 |
All taxpayers except married filing separately | $199,900 | $206,100 |
Married filing separately | $99,950 | $103,050 |
Charitable Deductions
Use of auto | 2021 | 2022 |
Deductible standard mileage rate | $0.14 | $0.14 |
Charitable fundraising "insubstantial benefit" limitation | 2021 | 2022 |
Low-cost article (re: unrelated business income) | $11.30 | $11.70 |
Gifts to donor in return for contribution | 2021 | 2022 |
Token gift maximum cost1 | $11.30 | $11.70 |
Minimum contribution amount1 | $56.50 | $58.50 |
2% threshold amount2 | $113 | $117 |
1 Contribution is fully deductible if minimum contribution amount is met and cost of token gift does not exceed maximum.
2 Charitable contribution is fully deductible if the benefit received by the donor doesn't exceed the lesser of the threshold amount or 2% of the amount of the contribution.
Child Tax Credit
Amount of credit | 2021 | 2022 |
Maximum credit per qualifying child | $3,000 ($3,600 for children under age 6) | $2,000 |
Nonrefundable credit for dependents who are not qualifying children | $500 | $500 |
Phaseout -- credit reduced by $50 for each $1,000 or fraction thereof of MAGI over (but not to be reduced below $2,000): | 2021 | 2022 |
Married filing jointly or surviving spouse | $150,000 | N/A |
Head of household | $112,500 | N/A |
Single or married filing separately | $75,000 | N/A |
Phaseout -- any remaining credit reduced by $50 for each $1,000 or fraction thereof of MAGI over: | 2021 | 2022 |
Married filing jointly | $400,000 | $400,000 |
All other filing status | $200,000 | $200,000 |
Refundability -- up to specified percentage of earned income in excess of specified amount1 | 2021 | 2022 |
Percentage | N/A | 15% |
Amount | N/A | $2,500 |
Maximum refundable amount of credit | Fully refundable1 | $1,500 |
1 For 2021, generally fully refundable; partially refundable if no principal place of abode in U.S. for one-half of year.
Classroom Expenses of Elementary and Secondary School Teachers
Classroom expense deduction | 2021 | 2022 |
Maximum above-the-line deduction | $250 | $300 |
Earned Income Tax Credit (EITC)
Investment income limit | 2021 | 2022 |
Excessive investment income limit ("disqualified income limit") | $10,000 | $10,300 |
Maximum amount of EITC per number of children | 2021 | 2022 |
0 children | $1,502 | $560 |
1 child | $3,618 | $3,733 |
2 children | $5,980 | $6,164 |
3 or more children | $6,728 | $6,935 |
Maximum amount of earned income on which EITC is based (earned income over this amount but under the threshold phaseout amount will not change the amount of the credit received) | 2021 | 2022 |
0 children | $9,820 | $7,320 |
1 child | $10,640 | $10,980 |
2 or more children | $14,950 | $15,410 |
Threshold phaseout amount for joint filers per number of children | 2021 | 2022 |
0 children | $17,560 | $15,290 |
1 child | $25,470 | $26,260 |
2 children | $25,470 | $26,260 |
3 or more children | $25,470 | $26,260 |
Threshold phaseout amount for other filers per number of children | 2021 | 2022 |
0 children | $11,610 | $9,160 |
1 child | $19,520 | $20,130 |
2 children | $19,520 | $20,130 |
3 or more children | $19,520 | $20,130 |
Completed phaseout amount for joint filers per number of children | 2021 | 2022 |
0 children | $27,380 | $22,610 |
1 child | $48,108 | $49,622 |
2 children | $53,865 | $55,529 |
3 or more children | $57,414 | $59,187 |
Completed phaseout amount for other filers per number of children | 2021 | 2022 |
0 children | $21,430 | $16,480 |
1 child | $42,158 | $43,492 |
2 children | $47,915 | $49,399 |
3 or more children | $51,464 | $53,057 |
Expatriation
Covered expatriate | 2021 | 2022 |
An individual with "average annual net income tax" of more than this amount for the five taxable years ending before his or her loss of citizenship is a covered expatriate for the purposes of IRC §877A(g)(1) | $172,000 | $178,000 |
IRC §877A(3) exclusion amount | $744,000 | $767,000 |
Foreign Earned Income
Amount excluded from income | 2021 | 2022 |
Exclusion amount | $108,700 | $112,000 |
Itemized Deductions
Phaseout threshold | 2021 | 2022 |
Married filing jointly | N/A | N/A |
Head of household | N/A | N/A |
Unmarried | N/A | N/A |
Married filing separately | N/A | N/A |
Kiddie Tax
Unearned income limit | 2021 | 2022 |
Amount exempt from tax | $1,100 | $1,150 |
Additional amount taxed at child's rate | $1,100 | $1,150 |
Unearned income over this amount generally taxed at parents' tax rates | $2,200 | $2,300 |
Parent's election | 2021 | 2022 |
Election to include child's income on parent's return -- child's gross income requirement | $1,100 - $11,000 | $1,150 - $11,500 |
AMT | 2021 | 2022 |
AMT exemption for child subject to kiddie tax | Lesser of $7,950 + child's earned income or $73,600 | Lesser of $8,200 + child's earned income or $75,900 |
Medicare Tax (additional payroll tax and unearned income contribution tax)
Payroll tax | 2021 | 2022 |
Additional Medicare payroll tax (and self-employment tax) percentage rate | 0.90% | 0.90% |
Applies to wages/self-employment income exceeding | 2021 | 2022 |
Individuals | $200,000 | $200,000 |
Married filing jointly | $250,000 | $250,000 |
Married filing separately | $125,000 | $125,000 |
Tax on unearned income | 2021 | 2022 |
Unearned income Medicare contribution tax rate | 3.80% | 3.80% |
Applies to lesser of (a) net investment income or (b) modified adjusted gross income exceeding | 2021 | 2022 |
Individuals | $200,000 | $200,000 |
Married filing jointly | $250,000 | $250,000 |
Married filing separately | $125,000 | $125,000 |
Nanny Tax
Compensation threshold | 2021 | 2022 |
Domestic employee coverage threshold | $2,300 | $2,400 |
Personal Exemption Amount
Amount | 2021 | 2022 |
Personal exemption amount | N/A | N/A |
Married filing jointly | 2021 | 2022 |
Phaseout threshold amount | N/A | N/A |
Completed phaseout amount after | N/A | N/A |
Head of household | 2021 | 2022 |
Phaseout threshold amount | N/A | N/A |
Completed phaseout amount after | N/A | N/A |
Unmarried | 2021 | 2022 |
Phaseout threshold amount | N/A | N/A |
Completed phaseout amount after | N/A | N/A |
Married filing separately | 2021 | 2022 |
Phaseout threshold amount | N/A | N/A |
Completed phaseout amount after | N/A | N/A |
"Saver's Credit"
Elective Deferrals and IRA or ABLE Contributions by Certain Individuals | 2021 | 2022 |
Maximum credit amount | $1,000 | $1,000 |
Applicable percentage of 50% applies to AGI | 2021 | 2022 |
Joint Return | $0 - $39,500 | $0 - $41,000 |
Head of Household | $0 - $29,625 | $0 - $30,750 |
Other | $0 - $19,750 | $0 - $20,500 |
Applicable percentage of 20% applies to AGI | 2021 | 2022 |
Joint Return | $39,501 - $43,000 | $41,001 - $44,000 |
Head of Household | $29,626 - $32,250 | $30,751 - $33,000 |
Other | $19,751 - $21,500 | $20,501 - $22,000 |
Applicable percentage of 10% applies to AGI | 2021 | 2022 |
Joint Return | $43,001 - $66,000 | $44,001 - $68,000 |
Head of Household | $32,251 - $49,500 | $33,001 - $51,000 |
Other | $21,501 - $33,000 | $22,001 - $34,000 |
Applicable percentage of 0% applies to AGI | 2021 | 2022 |
Joint Return | Over $66,000 | Over $68,000 |
Head of Household | Over $49,500 | Over $51,000 |
Other | Over $33,000 | Over $34,000 |
Standard Deductions
Amounts | 2021 | 2022 |
Married filing jointly or surviving spouse | $25,100 | $25,900 |
Head of household | $18,800 | $19,400 |
Unmarried | $12,550 | $12,950 |
Married filing separately | $12,550 | $12,950 |
Dependent--Standard deduction cannot exceed the greater of: | $1,100 or $350 + earned income | $1,150 or $400 + earned income |
Additional deduction for aged or blind (single or head of household) | $1,700 | $1,750 |
Additional deduction for aged or blind (all other filing statuses) | $1,350 | $1,400 |
Standard Mileage Rates
Applicable rates | 2021 | 2022 |
Use of auto for business purposes (cents per mile) | $0.56 | $0.585 |
Use of auto for medical purposes (cents per mile) | $0.16 | $0.18 |
Use of auto for moving purposes (cents per mile) | $0.16 | $0.18 |
2022 FEDERAL INCOME TAX RATE SCHEDULES (Individuals, Trusts, and Estates)
Single Taxpayers
If taxable income is: | Your tax is: |
Not over $10,275 | 10% of taxable income |
Over $10,275 to $41,775 | $1,027.50 + 12% of the excess over $10,275 |
Over $41,775 to $89,075 | $4,807.50 + 22% of the excess over $41,775 |
Over $89,075 to $170,050 | $15,213.50 + 24% of the excess over $89,075 |
Over $170,050 to $215,950 | $34,647.50 + 32% of the excess over $170,050 |
Over $215,950 to $539,900 | $49,335.50 plus 35% of the excess over $215,950 |
Over $539,900 | $162,718 plus 37% of the excess over $539,900 |
Married Filing Jointly and Surviving Spouses
If taxable income is: | Your tax is: |
Not over $20,550 | 10% of taxable income |
Over $20,550 to $83,550 | $2,055 + 12% of the excess over $20,550 |
Over $83,550 to $178,150 | $9,615 plus 22% of the excess over $83,550 |
Over $178,150 to $340,100 | $30,427 plus 24% of the excess over $178,150 |
Over $340,100 to $431,900 | $69,295 plus 32% of the excess over $340,100 |
Over $431,900 to $647,850 | $98,671 plus 35% of the excess over $431,900 |
Over $647,850 | $174,253.50 plus 37% of the excess over $647,850 |
Married Individuals Filing Separately
If taxable income is: | Your tax is: |
Not over $10,275 | 10% of taxable income |
Over $10,275 to $41,775 | $1,027.50 + 12% of the excess over $10,275 |
Over $41,775 to $89,075 | $4,807.50 plus 22% of the excess over $41,775 |
Over $89,075 to $170,050 | $15,213.50 plus 24% of the excess over $89,075 |
Over $170,050 to $215,950 | $34,647.50 plus 32% of the excess over $170,050 |
Over $215,950 to $323,925 | $49,335.50 plus 35% of the excess over $215,950 |
Over $323,925 | $87,126.75 plus 37% of the excess over $323,925 |
Heads of Household
If taxable income is: | Your tax is: |
Not over $14,650 | 10% of taxable income |
Over $14,650 to $55,900 | $1,465 + 12% of the excess over $14,650 |
Over $55,900 to $89,050 | $6,415 plus 22% of the excess over $55,900 |
Over $89,050 to $170,050 | $13,708 plus 24% of the excess over $89,050 |
Over $170,050 to $215,950 | $33,148 plus 32% of the excess over $170,050 |
Over $215,950 to $539,900 | $47,836 plus 35% of the excess over $215,950 |
Over $539,900 | $161,218.50 plus 37% of the excess over $539,900 |
Trusts and Estates
If taxable income is: | Your tax is: |
Not over $2,750 | 10% of taxable income |
Over $2,750 to $9,850 | $275 + 24% of the excess over $2,750 |
Over $9,850 to $13,450 | $1,979 + 35% of the excess over $9,850 |
Over $13,450 | $3,239 + 37% of the excess over $13,450 |
2021 FEDERAL INCOME TAX RATE SCHEDULES (Individuals, Trusts, and Estates)
Single Taxpayers
If taxable income is: | Your tax is: |
Not over $9,950 | 10% of taxable income |
Over $9,950 to $40,525 | $995 + 12% of the excess over $9,950 |
Over $40,525 to $86,375 | $4,664 + 22% of the excess over $40,525 |
Over $86,375 to $164,925 | $14,751 + 24% of the excess over $86,375 |
Over $164,925 to $209,425 | $33,603 + 32% of the excess over $164,925 |
Over $209,425 to $523,600 | $47,843 plus 35% of the excess over $209,425 |
Over $523,600 | $157,804.25 plus 37% of the excess over $523,600 |
Married Filing Jointly and Surviving Spouses
If taxable income is: | Your tax is: |
Not over $19,900 | 10% of taxable income |
Over $19,900 to $81,050 | $1,990 + 12% of the excess over $19,900 |
Over $81,050 to $172,750 | $9,328 plus 22% of the excess over $81,050 |
Over $172,750 to $329,850 | $29,502 plus 24% of the excess over $172,750 |
Over $329,850 to $418,850 | $67,206 plus 32% of the excess over $329,850 |
Over $418,850 to $628,300 | $95,686 plus 35% of the excess over $418,850 |
Over $628,300 | $168,993.50 plus 37% of the excess over $628,300 |
Married Individuals Filing Separately
If taxable income is: | Your tax is: |
Not over $9,950 | 10% of taxable income |
Over $9,950 to $40,525 | $995 + 12% of the excess over $9,950 |
Over $40,525 to $86,375 | $4,664 plus 22% of the excess over $40,525 |
Over $86,375 to $164,925 | $14,751 plus 24% of the excess over $86,375 |
Over $164,925 to $209,425 | $33,603 plus 32% of the excess over $164,925 |
Over $209,425 to $314,150 | $47,843 plus 35% of the excess over $209,425 |
Over $314,150 | $84,496.75 plus 37% of the excess over $314,150 |
Heads of Household
If taxable income is: | Your tax is: |
Not over $14,200 | 10% of taxable income |
Over $14,200 to $54,200 | $1,420 + 12% of the excess over $14,200 |
Over $54,200 to $86,350 | $6,220 plus 22% of the excess over $54,200 |
Over $86,350 to $164,900 | $13,293 plus 24% of the excess over $86,350 |
Over $164,900 to $209,400 | $32,145 plus 32% of the excess over $164,900 |
Over $209,400 to $523,600 | $46,385 plus 35% of the excess over $209,400 |
Over $523,600 | $156,355 plus 37% of the excess over $523,600 |
Trusts and Estates
If taxable income is: | Your tax is: |
Not over $2,650 | 10% of taxable income |
Over $2,650 to $9,550 | $265 + 24% of the excess over $2,650 |
Over $9,550 to $13,050 | $1,921 + 35% of the excess over $9,550 |
Over $13,050 | $3,146 + 37% of the excess over $13,050 |
BUSINESS PLANNING
Adoption Assistance Programs
Adoption assistance | 2021 | 2022 |
Maximum amount that can be excluded from employee's gross income | $14,440 | $14,890 |
Phaseout threshold amount | $216,660 | $223,410 |
Completed phaseout amount after | $256,660 | $263,410 |
Earnings Subject to FICA Taxes (Taxable Wage Base)
FICA tax | 2021 | 2022 |
Maximum annual earnings subject to Social Security taxes | $142,800 | $147,000 |
Social Security and Medicare combined tax rate | 15.30%1 | 15.30%1 |
OASDI portion (Social Security) | 12.40% | 12.40% |
Hospital Insurance portion (Medicare) | 2.90%1 | 2.90%1 |
1 An additional Medicare (HI) employee contribution rate of 0.9% (for a total employee contribution of 2.35%, and a total combined Medicare contribution rate of 3.8%) is assessed on wages exceeding $200,000 ($250,000 for married couples filing joint returns, $125,000 for married individuals filing separate returns). For married individuals filing joint returns, the additional 0.9% tax applies to the couples combined wages (to the extent the combined wages exceed $250,000).
Health Insurance Deduction for Self-Employed
Health insurance premiums | 2021 | 2022 |
Deduction for health insurance premiums paid by self-employed persons | 100% | 100% |
Qualified Transportation Fringe Benefits
Qualified transportation fringe benefits | 2021 | 2022 |
Commuter vehicles and transit pass monthly exclusion amount | $270 | $280 |
Qualified parking monthly exclusion amount | $270 | $280 |
Qualified bicycle commuting reimbursement fringe benefit (monthly amount) | N/A | N/A |
Section 179 Expensing
Section 179 expensing | 2021 | 2022 |
Maximum amount that may be deducted under IRC Section 179 | $1,050,000 | $1,080,000 |
Deduction reduced by the amount by which the cost of §179 property placed in service during the year exceeds this amount | $2,620,000 | $2,700,000 |
Small Business Tax Credit for Providing Healthcare Coverage
Amount of credit | 2021 | 2022 |
Maximum credit percentage | 50% | 50% |
Partial credit | 2021 | 2022 |
Number of full-time equivalent employees (FTEs) fewer than: | 25 | 25 |
Maximum average annual wages less than: | $55,600 | $57,400 |
Full credit | 2021 | 2022 |
Number of full-time equivalent employees (FTEs) no more than: | 10 | 10 |
Maximum average annual wages less than or equal to: | $27,800 | $28,700 |
Special Additional First-Year Depreciation Allowance
Bonus depreciation | 2021 | 2022 |
"Bonus" depreciation for qualified property acquired and placed in service during specified time periods | 100% | 100% |
Standard Mileage Rate (Per Mile)
Business use of auto | 2021 | 2022 |
Use of auto for business purposes | $0.56 | $0.585 |
EDUCATION PLANNING
American Opportunity and Lifetime Learning Credits
Education credits | 2021 | 2022 |
Maximum American Opportunity credit | $2,500 | $2,500 |
Maximum Lifetime Learning credit | $2,000 | $2,000 |
MAGI phaseout range for American Opportunity credit | 2021 | 2022 |
Single--phaseout threshold amount | $80,000 | $80,000 |
Single--completed phaseout amount after | $90,000 | $90,000 |
Married filing jointly--phaseout threshold amount | $160,000 | $160,000 |
Married filing jointly--completed phaseout amount after | $180,000 | $180,000 |
MAGI phaseout range for Lifetime Learning credit | 2021 | 2022 |
Single--phaseout threshold amount | $80,000 | $80,000 |
Single--completed phaseout amount after | $90,000 | $90,000 |
Married filing jointly--phaseout threshold amount | $160,000 | $160,000 |
Married filing jointly--completed phaseout amount after | $180,000 | $180,000 |
Coverdell Education Savings Accounts
Coverdell ESAs | 2021 | 2022 |
Annual contribution limit | $2,000 | $2,000 |
MAGI phaseout range for Coverdell education savings accounts | 2021 | 2022 |
Single--phaseout threshold amount | $95,000 | $95,000 |
Single--completed phaseout amount after | $110,000 | $110,000 |
Married filing jointly--phaseout threshold amount | $190,000 | $190,000 |
Married filing jointly--completed phaseout threshold amount | $220,000 | $220,000 |
Deduction for Qualified Higher Education Expenses
Higher education expenses | 2021 | 2022 |
Maximum deduction | N/A | N/A |
MAGI maximum for full $4,000 deduction | 2021 | 2022 |
Single | N/A | N/A |
Married filing jointly | N/A | N/A |
MAGI range for $2,000 deduction | 2021 | 2022 |
Single--MAGI greater than this amount: | N/A | N/A |
Single--MAGI does not exceed this amount: | N/A | N/A |
Married filing jointly--MAGI greater than this amount: | N/A | N/A |
Married filing jointly--MAGI does not exceed this amount: | N/A | N/A |
Deduction for Student Loan Interest
Education loan interest deduction | 2021 | 2022 |
Maximum deduction for interest paid on qualified education loans | $2,500 | $2,500 |
MAGI phaseout range | 2021 | 2022 |
Single--phaseout threshold amount | $70,000 | $70,000 |
Single--completed phaseout amount after | $85,000 | $85,000 |
Married filing jointly--phaseout threshold amount | $140,000 | $145,000 |
Married filing jointly--completed phaseout amount after | $170,000 | $175,000 |
Gift Tax Exclusion
Gift tax | 2021 | 2022 |
Annual gift tax exclusion--single individual | $15,000 | $16,000 |
Annual gift tax exclusion--joint gift | $30,000 | $32,000 |
Lump-sum gift to 529 plan--single individual | $75,000 | $80,000 |
Lump-sum gift to 529 plan--joint gift | $150,000 | $160,000 |
Kiddie Tax
Kiddie tax | 2021 | 2022 |
Children's unearned income over this amount generally taxed at parents' tax rates | $2,200 | $2,300 |
U.S. Savings Bonds Interest Exclusion for College Expenses
Joint returns | 2021 | 2022 |
Phaseout threshold for joint returns | $124,800 | $128,650 |
Completed phaseout amount after | $154,800 | $158,650 |
Other returns | 2021 | 2022 |
Phaseout threshold for other returns | $83,200 | $85,800 |
Completed phaseout amount after | $98,200 | $100,800 |
PROTECTION PLANNING
Eligible Long-Term Care Premium Deduction Limits
LTC premium deduction limits | 2021 | 2022 |
Age 40 or under | $450 | $450 |
Age 41-50 | $850 | $850 |
Age 51-60 | $1,690 | $1,690 |
Age 61-70 | $4,520 | $4,510 |
Over age 70 | $5,640 | $5,640 |
Per Diem Limit
LTC periodic payments | 2021 | 2022 |
Periodic payments for qualified long-term care insurance/certain life insurance | $400 | $390 |
Archer Medical Savings Accounts
High deductible health plan--self-only coverage | 2021 | 2022 |
Annual deductible--minimum | $2,400 | $2,450 |
Annual deductible--maximum | $3,600 | $3,700 |
Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed | $4,800 | $4,950 |
High deductible health plan--family coverage | 2021 | 2022 |
Annual deductible--minimum | $4,800 | $4,950 |
Annual deductible--maximum | $7,150 | $7,400 |
Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed | $8,750 | $9,050 |
Flexible Spending Account (FSA) for Healthcare
Health care FSAs | 2021 | 2022 |
Maximum salary reduction contribution | $2,750 | $2,850 |
Health Savings Accounts (HSAs)
Annual contribution limit | 2021 | 2022 |
Self-only coverage | $3,600 | $3,650 |
Family coverage | $7,200 | $7,300 |
High deductible health plan--self-only coverage | 2021 | 2022 |
Annual deductible--minimum | $1,400 | $1,400 |
Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed | $7,000 | $7,050 |
High deductible health plan--family coverage | 2021 | 2022 |
Annual deductible--minimum | $2,800 | $2,800 |
Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed | $14,000 | $14,100 |
Catch-up contributions | 2021 | 2022 |
Annual catch-up contribution limit for individuals age 55 or older | $1,000 | $1,000 |
ESTATE PLANNING
Key indexed figures | 2021 | 2022 |
Annual gift exclusion: | $15,000 | $16,000 |
Gift and estate tax applicable exclusion amount: | $11,700,000 + DSUEA1 | $12,060,000 + DSUEA1 |
Noncitizen spouse annual gift exclusion: | $159,000 | $164,000 |
Generation-skipping transfer (GST) tax exemption: | $11,700,0002 | $12,060,0002 |
Special use valuation limit (qualified real property in decedent's gross estate): | $1,190,000 | $1,230,000 |
1 Basic exclusion amount plus deceased spousal unused exclusion amount (exclusion is portable for 2011 and later years).
2 The GST tax exemption is not portable.
2021 and 2022 Gift and Estate Tax Rate Schedule
Taxable Estate | Tentative Tax Equals | Plus | Of Amount Over |
0 - $10,000 | $0 | 18% | $0 |
$10,000 - $20,000 | $1,800 | 20% | $10,000 |
$20,000 - $40,000 | $3,800 | 22% | $20,000 |
$40,000 - $60,000 | $8,200 | 24% | $40,000 |
$60,000 - $80,000 | $13,000 | 26% | $60,000 |
$80,000 - $100,000 | $18,200 | 28% | $80,000 |
$100,000 - $150,000 | $23,800 | 30% | $100,000 |
$150,000 - $250,000 | $38,800 | 32% | $150,000 |
$250,000 - $500,000 | $70,800 | 34% | $250,000 |
$500,000 - $750,000 | $155,800 | 37% | $500,000 |
$750,000 - $1,000,000 | $248,300 | 39% | $750,000 |
$1,000,000 + | $345,800 | 40% | $1,000,000 |
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Credit shelter amount $11,700,000 in 2021 and $12,060,000 in 2022 | Unified credit amount $4,625,800 in 2021 and $4,769,800 in 2022 | ||
GOVERNMENT BENEFITS
Social Security
Social Security Cost-of-living adjustment (COLA) | 2021 | 2022 |
For Social Security and Supplemental Security Income (SSI) beneficiaries | 1.30% | 5.90% |
Tax rate--employee | 2021 | 2022 |
FICA tax -- Employee | 7.65% | 7.65% |
Social Security (OASDI) portion of tax | 6.20% | 6.20% |
Medicare (HI) portion of tax | 1.45%1 | 1.45%1 |
Tax rate--self-employed | 2021 | 2022 |
Self-Employed | 15.30% | 15.30% |
Social Security (OASDI) portion of tax | 12.40% | 12.40% |
Medicare (HI) portion of tax | 2.90%1 | 2.90%1 |
1 An additional 0.9% Medicare/hospital insurance tax (for a total employee contribution of 2.35%) is assessed on wages exceeding $200,000 ($250,000 for married couples filing joint returns, $125,000 for married individuals filing separate returns). An additional 0.9% Medicare/hospital insurance tax (for a total Medicare portion of 3.8%) is assessed on self-employment income exceeding $200,000 ($250,000 for married couples filing joint returns, $125,000 for married individuals filing separate returns).
Maximum taxable earnings | 2021 | 2022 |
Social Security (OASDI only) | $142,800 | $147,000 |
Medicare (HI only) | No limit | No limit |
Quarter of coverage | 2021 | 2022 |
Earnings required | $1,470 | $1,510 |
Retirement earnings test--exempt amounts--Under full retirement age--Benefits reduced by $1 for each $2 earned above: | 2021 | 2022 |
Yearly figure | $18,960 | $19,560 |
Monthly figure | $1,580 | $1,630 |
Retirement earnings test--exempt amounts--Year individual reaches full retirement age--Benefits reduced by $1 for each $3 earned above (applies only to earnings for months prior to attaining full retirement age): | 2021 | 2022 |
Yearly figure | $50,520 | $51,960 |
Monthly figure | $4,210 | $4,330 |
Retirement earnings test--exempt amounts--Beginning the month individual attains full retirement age | 2021 | 2022 |
| No limit on earnings | No limit on earnings |
Social Security disability thresholds | 2021 | 2022 |
Substantial gainful activity (SGA) for the sighted (monthly figure) | $1,310 | $1,350 |
Substantial gainful activity for the blind (monthly figure) | $2,190 | $2,260 |
Trial work period (TWP) (monthly figure) | $940 | $970 |
SSI federal payment standard | 2021 | 2022 |
Individual (monthly figure) | $794 | $841 |
Couple (monthly figure) | $1,191 | $1,261 |
SSI resource limits | 2021 | 2022 |
Individual | $2,000 | $2,000 |
Couple | $3,000 | $3,000 |
SSI student exclusion limits | 2021 | 2022 |
Monthly limit | $1,930 | $2,040 |
Annual limit | $7,770 | $8,230 |
Maximum Social Security benefit | 2021 | 2022 |
Worker retiring at full retirement age (monthly figure) | $3,148 | $3,345 |
Formula for Monthly Primary Insurance Amount (PIA) | 2021 | 2022 |
(90% of first X of AIME + 32% of the AIME over X and through Y + 15% of AIME over Y) | X=$996 Y=$6,002 | X=$1,024 Y=$6,172 |
Medicare
Medicare monthly premium amounts--Part A (hospital insurance) premium | 2021 | 2022 |
Individuals with 40 or more quarters of Medicare-covered employment | $0 | $0 |
Individuals with less than 40 quarters of Medicare-covered employment who are not otherwise eligible for premium-free hospital insurance | Up to $471 | Up to $499 |
Medicare monthly premium amounts--Part B (medical insurance) monthly premium--for beneficiaries who file an individual income tax return with income that is: | 2021 | 2022 |
Less than or equal to $91,000 | $148.502 | $170.102 |
$91,001 - $114,000 | $207.90 | $238.10 |
$114,001 - $142,000 | $297.00 | $340.20 |
$142,001 - $170,000 | $386.10 | $442.30 |
$170,001 - $499,999 | $475.20 | $544.30 |
$500,000 and above | $504.90 | $578.30 |
Medicare monthly premium amounts--Part B (medical insurance) monthly premium--for beneficiaries who file a joint income tax return with income that is: | 2021 | 2022 |
Less than or equal to $182,000 | $148.502 | $170.102 |
$182,001 - $228,000 | $207.90 | $238.10 |
$228,001 - $284,000 | $297.00 | $340.20 |
$284,001 - $340,000 | $386.10 | $442.30 |
$340,001 - $749,999 | $475.20 | $544.30 |
$750,000 and above | $504.90 | $578.30 |
Medicare monthly premium amounts--Part B (medical insurance) monthly premium--for beneficiaries who are married, but file a separate tax return from their spouse and lived with spouse at some time during the taxable year with income that is: | 2021 | 2022 |
Less than or equal to $91,000 | $148.502 | $170.102 |
$91,001 - $408,999 | $475.20 | $544.30 |
$409,000 and above | $504.90 | $578.30 |
2 This is the standard Part B premium amount. However, some people who get Social Security benefits will pay more or less than this amount.
Original Medicare plan deductible and coinsurance amounts--Part A (hospital insurance) | 2021 | 2022 |
Deductible per benefit period | $1,484 | $1,556 |
Coinsurance per day for 61st to 90th day of each benefit period | $371 | $389 |
Coinsurance per day for 91st to 150th day for each lifetime reserve day (total of 60 lifetime reserve days--nonrenewable) | $742 | $778 |
Original Medicare plan deductible and coinsurance amounts | 2021 | 2022 |
Skilled nursing facility coinsurance per day for 21st to 100th day of each benefit period | $185.50 | $194.50 |
Original Medicare plan deductible and coinsurance amounts--Part B (medical insurance) annual deductible | 2021 | 2022 |
Individual pays 20 percent of the Medicare-approved amount for services after deductible is met | $203 | $233 |
Medicaid
Income threshold | 2021 | 2022 |
Monthly income threshold for income-cap states ("300 percent cap limit") | $2,382 | $2,523 |
Monthly maintenance needs allowance for at-home spouse | 2021 | 2022 |
Minimum3 | $2,155.00 | $2,177.50 |
Maximum | $3,259.50 | $3,435.00 |
Community spousal resource allowance | 2021 | 2022 |
Minimum | $26,076.00 | $27,480.00 |
Maximum | $130,380.00 | $137,400.00 |
3 Amounts listed actually effective as of July of prior year; different amounts apply to Alaska and Hawaii.
RETIREMENT PLANNING
Employee/Individual Contribution Limits
Elective deferral limits | 2021 | 2022 |
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs1 [Includes Roth 401(k) and Roth 403(b) contributions] | Lesser of $19,500 or 100% of participant's compensation | Lesser of $20,500 or 100% of participant's compensation |
SIMPLE 401(k) plans and SIMPLE IRA plans1 | Lesser of $13,500 or 100% of participant's compensation | Lesser of $14,000 or 100% of participant's compensation |
1 Must aggregate employee contributions to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers. 457(b) plan contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively, a 20% maximum contribution).
IRA contribution limits | 2021 | 2022 |
Traditional IRAs | Lesser of $6,000 or 100% of earned income | Lesser of $6,000 or 100% of earned income |
Roth IRAs | Lesser of $6,000 or 100% of earned income | Lesser of $6,000 or 100% of earned income |
Additional "catch-up" limits (individuals age 50 or older) | 2021 | 2022 |
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs2 | $6,500 | $6,500 |
SIMPLE 401(k) plans and SIMPLE IRA plans | $3,000 | $3,000 |
IRAs (traditional and Roth) | $1,000 | $1,000 |
2 Special catch-up limits may also apply to 403(b) and 457(b) plan participants.
Employer Contribution/Benefit3 Limits
Defined benefit plan limits | 2021 | 2022 |
Annual contribution limit per participant | No predetermined limit. Contributions based on amount needed to fund promised benefits | No predetermined limit. Contributions based on amount needed to fund promised benefits. |
Annual benefit limit per participant | Lesser of $230,000 or 100% of average compensation for highest three consecutive years | Lesser of $245,000 or 100% of average compensation for highest three consecutive years |
Defined contribution plan limits [qualified plans, 403(b) plans, SEP, and SIMPLE plans] | 2021 | 2022 |
Annual addition limit per participant (employer contributions; employee pre-tax, after-tax, and Roth contributions; and forfeitures) (does not apply to SIMPLE IRA plans) | Lesser of $58,000 or 100% (25% for SEP) of participant's compensation | Lesser of $61,000 or 100% (25% for SEP) of participant's compensation |
Maximum tax-deductible employer contribution [not applicable to 403(b) plans] | 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pre-tax and Roth contributions; 100% for SIMPLE plans | 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pre-tax and Roth contributions; 100% for SIMPLE plans |
3 For self-employed individuals, compensation generally means earned income. This means that, for qualified plans, deductible contributions for a self-employed individual are limited to 20% of net earnings from self-employment (net profits minus self-employment tax deduction), and special rules apply in calculating the annual additions limit.
Compensation Limits/Thresholds
Retirement plan compensation limits | 2021 | 2022 |
Maximum compensation per participant that can be used to calculate tax-deductible employer contribution (qualified plans and SEPs) | $290,000 | $305,000 |
Compensation threshold used to determine a highly compensated employee | $130,000 (when 2021 is the look-back year) | $135,000 (when 2022 is the look-back year) |
Compensation threshold used to determine a key employee in a top-heavy plan | $1 for more-than-5% owners, $185,000 for officers, $150,000 for more-than-1% owners | "$1 for more-than-5% owners $200,000 for officers $150,000 for more-than-1% owners" |
Compensation threshold used to determine a qualifying employee under a SIMPLE plan | $5,000 | $5,000 |
Compensation threshold used to determine a qualifying employee under a SEP plan | $650 | $650 |
Traditional deductible IRA income limits — Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers covered by an employer-sponsored plan and filing as: | 2021 | 2022 |
Single | $66,000 - $76,000 | $68,000 - $78,000 |
Married filing jointly | $105,000 - $125,000 | $109,000 - $129,000 |
Married filing separately | $0 - $10,000 | $0 - $10,000 |
Traditional deductible IRA income limits — Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers not covered by an employer-sponsored retirement plan but filing a: | 2021 | 2022 |
Joint return with a spouse who is covered by an employer-sponsored retirement plan | $198,000 - $208,000 | $204,000 - $214,000 |
Roth IRA compensation limits — Income phase-out range for determining ability to fund Roth IRA for taxpayers filing as: | 2021 | 2022 |
Single | $125,000 - $140,000 | $129,000 - $144,000 |
Married filing jointly | $198,000 - $208,000 | $204,000 - $214,000 |
Married filing separately | $0 - $10,000 | $0 - $10,000 |
INVESTMENT PLANNING
Maximum Tax on Long-Term Capital Gains and Qualified Dividends
0% rate applies (taxable income thresholds) | 2021 | 2022 |
Single | Up to $40,400 | Up to $41,675 |
Married filing jointly | Up to $80,800 | Up to $83,350 |
Married filing separately | Up to $40,400 | Up to $41,675 |
Head of household | Up to $54,100 | Up to $55,800 |
15% rate applies (taxable income thresholds) | 2021 | 2022 |
Single | $40,400 to $445,850 | $41,675 to $459,750 |
Married filing jointly | $80,800 to $501,600 | $83,350 to $517,200 |
Married filing separately | $40,400 to $250,800 | $41,675 to $258,600 |
Head of household | $54,100 to $473,750 | $55,800 to $488,500 |
20% rate applies (taxable income thresholds) | 2021 | 2022 |
Single | Over $445,850 | Over $459,750 |
Married filing jointly | Over $501,600 | Over $517,200 |
Married filing separately | Over $250,800 | Over $258,600 |
Head of household | Over $473,750 | Over $488,500 |
Unearned Income Medicare Contribution Tax ("Net Investment Income Tax")
Amount of tax | 2021 | 2022 |
Tax percentage | 3.80% | 3.80% |
Applies to lesser of (a) net investment income or (b) modified adjusted gross income exceeding: | 2021 | 2022 |
Individuals | $200,000 | $200,000 |
Married filing jointly | $250,000 | $250,000 |
Married filing separately | $125,000 | $125,000 |
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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal professional.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
This article was prepared by Broadridge.
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