Standard Deduction and Income Thresholds Increasing in 2022
By: Stacey Nickens
This past week, the IRS announced the 2022 tax brackets. With inflation on the rise, the IRS has raised the income thresholds for each tax bracket as well as the size of the standard deduction.
Both tax brackets and the standard deduction will rise by around 3% to match the rising costs of goods and services.
The new standard deduction for married couples filing jointly will be $25,900 and for single filers will be $12,950. Heads of households will be able to take a standard deduction of $19,400.
The tax rates will remain the same, with the lowest being 10% and the highest being 37%.
The thresholds for joint filers will be as follows:
10%: Income up to $20,550
12%: Income between $20,550 and $83,550
22%: Income between $83,550 and $178,150
24%: Income between $178,150 and $340,100
32%: Income between $340,100 and $431,900
35%: Income between $431,900 and $647,850
37%: Income over $647,850
The thresholds for single filers will be as follows:
10%: Income up to $10,275
12%: Income between $10,275 and $41,775
22% Income between $41,775 and $89,075
24%: Income between $89,075 and $170,050
32%: Income between $170,050 and $215,950
35%: Income between $215,950 and $539,900
37: Income over $539,900
The above rates will be applied to taxable income, after the standard deduction and other credits have reduced taxable income.
The IRS also announced the retirement plan contribution adjustments for 2022. Click here to learn more.