2022 Tax Update

Tax rates change annually. These are the updates for 2022.

2022 income tax brackets

For individuals, taxable income over…

$1	10%
$10,275	12%
$41,775	22%
$89,075	24%
$170,050	32%
$215,950	35%
$539,900	37%

For married couples filing joint returns, taxable income over…

$1	10%
$20,550	12%
$83,550	22%
$178,150	24%
$340,100	32%
$431,900	35%
$647,850	37%

For heads of households, taxable income over…

$1	10%
$14,650	12%
$55,900	22%
$89,050	24%
$170,000	32%
$215,950	35%
$539,900	37%

2022 Long-term capital gains rates

For unmarried individuals, taxable income over…

$1	0%
$41,675	15%
$200,000	18.8%*
$459,750	23.8%*

*Includes 3.8% net investment income tax

For married individuals filing joint returns, taxable income over…

$1	0%
$83,350	15%
$250,000	18.8%*
$517,200	23.8%*

*Includes 3.8% net investment income tax

For heads of household, taxable income over…

$1	0%
$55,800	%15
$200,000	18.8%*
$488,500	23.8%*

*Includes 3.8% net investment income tax

2022 IRA contribution limits

Under age 50	$6,000
Age 50 or over	$7,000

Traditional and Roth IRA contribution limits

Depending upon whether or not you and your spouse have a retirement plan at work, your IRA contribution may not be tax deductible and a Roth contribution might not be possible. See hereafter.

2022 Traditional IRA deductible contribution income limits

Covered by a plan at work…

Single or Head of Household…	….and your Modified AGI is…	…then you can take…
	$68,000 or less	full deduction
	in between	partial deduction
	$78,000 or more	no deduction
Married filing jointly or qualifying widower…	…and your Modified AGI is…	…then you can take…
	$109,000 or less	partial deduction
	in between	partial deduction
	$129,000 or more	no deduction

Follow this chart if you do have a retirement plan at work

Not covered by a plan at work…

Single, Head of Household or Qualifying Widower	Regardless of your income…	…you can take a full deduction
Married with a spouse who does not have a plan at work	Regardless of your income…	…you can take a full deduction
Married with a spouse who does have a plan at work …	…and your Modified AGI is…	…then you can take…
	$204,000 or less	full deduction
	in between	partial deduction
	$214,000 or more	no deduction

Follow this chart if you don’t have a retirement plan at work

2022 Roth IRA contribution income limits

Roth IRA contributions, but not Roth conversions, are limited by income.

2020 income	Single	Married Filing Jointly
May make a full Roth contribution	$129,000 or less	$204,000 or less
Contribution gradually reduced	in between	in between
Not eligible	$144,000 or more	$214,000 or more

Maximum income for Roth contributions

2022 SEP and Simple IRA contribution limits

SEP IRAs and Simple IRAs allow larger contributions than IRAs, but as discussed in the book, require rules to be followed.

SEP	$61,000
Simple	$14,000

The Simple IRA allows another $3,000 contribution if you are over age 50.

2022 401k contribution limits

Employee	$20,500
Max including employer	$61,000
If you are over age 50, add the “catch up” amount	$6,500
Highly-compensated employee, income above	$135,000

Over age 50? Max employer and employee is $64,500.

2022 estate tax exemption

Unmarried individuals	$12.06 million
Married couples	$24.12 million

These limits expire in 2025.

2022 Social Security and Medicare Taxes

These are also called FICA taxes, or payroll taxes.

Maximum earnings subject to Social Security Tax (OASDI):	$147,000
OASDI tax rate	12.4%
Max earnings subject to Medicare tax	no cap
Medicare tax rate	2.9%

Self-employed people pay all of it: 15.3%. Or, for employees, they pay half, employers pay half.

Medicare Surtax (IRMAA) in 2022

2020 modified adjusted gross income above….

Single	MFJ	MF Separate	2022 Part B Premium	Part D surtax
$1	$1	$1	$170.10	$0
$91,000	$182,000		$238.10	$12.40
$114,000	$228,000		$340.20	$32.10
$142,000	$284,000		$442.30	$51.70
$170,000	$340,000		$544.30	$71.30
$499,999	$749,999	$91,000	$578.30	$77.90

Income earned two years ago forces a monthly Medicare surtax for two years.

2022 HSA, HRA and FSA

HSA

Health savings accounts, health reimbursement accounts and flexible spending accounts; here are the contribution limits for 2021.

HSA annual contribution individual	$3,650
HSA annual contribution family	$7,300
HSA over age 55 catch-up	$1,000
QSEHRA annual contribution limit individual	$5,450
QSEHRA annual contribution limit family	$11,050
FSA contribution limit	$2,850
Dependent care FSA contribution limit	$5,000

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