Key Federal Tax Figures for 2022
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Several points of interest emerge from a review of the 2022 figures. These include:
Increase in Standard Deduction
The tax reform legislation enacted in December 2017 nearly doubled the standard deduction. For 2022, the new higher amounts have increased again by an inflation adjustment. For a married couple filing a joint return, the increase is $800, to $25,900. Similar increases occurred for heads of households, single individuals, and married couples filing separate returns.
Automobile Mileage Rates
In June 2022, the IRS made a rare midyear increase to the optional mileage rates to better reflect recent changes in fuel prices. The increased rates are effective July 1, 2022.
From January 1 through June 30, 2022, the standard mileage rate for business travel is 58.5 cents per mile and the tax-deductible mileage rate for medical mileage is 18.0 cents per mile.
Effective July 1, 2022, the standard mileage rate for business is 62.5 cents per mile and the tax-deductible mileage rate for medical mileage is 22.0 cents per mile. The charitable mileage rate remained unchanged at 14.0 cents per mile.
Note that with the suspension of the moving expense deduction, there is no mileage reimbursement rate for moving mileage.
Other Inflation Adjustments for 2022
Inflation adjustments affect many areas, but not everything. Examine the specific issues that affect your organization carefully. Some examples:
|In 2021 and Returns for 2021||In 2022 and Returns for 2022|
|Foreign earned income exclusion||$108,700||$112,000|
|OASDI maximum wage base||$142,800||$147,000|
|Maximum annual contribution to defined contribution plan||$58,000||$61,000|
|Maximum salary deduction for 401(k)/403(b)||$19,500||$20,500|
|401(k)/403(b) over 50 “catch-up” limit||$6,500||$6,500|
|IRA contribution limit||$6,000||$6,000|
|IRA over 50 “catch-up” limit||$1,000||$1,000|
|Highly compensated employee limit||$130,000||$135,000|
|Annual gift tax exclusion amount||$15,000||$16,000|
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