The IRS has released its annual inflation adjusted tax numbers for 2022. Below we have highlighted some of the most relevant updates for tax brackets, retirement contributions, and estate and gifting limits, as compared to 2021 figures.

Individual Income Taxes
Income Tax Brackets – Single Tax Filer
2022 2021
10% Up to $10,275 Up to $9,950
12% $10,276 to $41,775 $9,951 to $40,525
22% $41,776 to $89,075 $40,526 to $86,375
24% $89,076 to $170,050 $86,376 to $164,925
32% $170,051 to $215,950 $164,926 to $209,425
35% $215,951 to $539,900 $209,426 to $523,600
37% Over $539,900 Over $523,600
Standard Deduction $12,950 $12,550
Long-Term Capital Gains
0% Up to $41,675 Up to $40,400
15% $41,676 to $459,750 $40,401 to $445,850
20% Over $459,750 Over $445,850
Income Tax Brackets – Married Filing Jointly
2022 2021
10% Up to $20,550 Up to $19,900
12% $20,551 to $83,550 $19,901 to $81,050
22% $83,551 to $178,150 $81,051 to $172,750
24% $178,151 to $340,100 $172,751 to $329,850
32% $340,101 to $431,900 $329,851 to $418,850
35% $431,901 to $647,850 $418,851 to $628,300
37% Over $647,850 Over $628,301
Standard Deduction $25,900 $25,100
Long-Term Capital Gains
0% Up to $83,350 Up to $80,800
15% $83,351 to $517,200 $80,801 to $501,600
20% Over $517,200 Over $501,600
Retirement Plan Contribution Limits
2022 2021
401(k), 403(b), 457 plans $20,500 $19,500
–   50+ catch up contribution $6,500 $6,500
IRA – Traditional & Roth $6,000 $6,000
–   50+ catch up contribution $1,000 $1,000
SIMPLE IRA $14,000 $13,500
–   50+ catch up contribution $3,000 $3,000
Defined Contribution Plan $61,000 $58,000
Gift & Estate Tax
2022 2021
Annual Gift Exclusion $16,000 $15,000
Federal Estate Tax & Gift Tax Exemption $12,060,000 $11,700,000
Maximum Transfer Tax Rate 40% 40%
Annual Gift Exclusion to Non-U.S. Citizen Spouse $164,000 $159,000

 

 

 

In addition to the tax figures above, the Net Investment Income Tax (NIIT) applies at a rate of 3.8% to certain net investment income of individuals, estates, and trusts that have income above the statutory threshold amounts. The threshold amounts are $200,000 for single tax-payers and $250,000 for married filing jointly.

If you have any questions, please feel free to contact us or schedule a conversation.

Author:
Thomas Burleigh, CFP®
Wealth Manager
Tom Burleigh, CFP, Wealth Manager

Disclosure:

This article does not contain any legal or tax advice. You should always consult with your attorney, accountant, or other professional advisors before changing or implementing any tax, investment, or estate planning strategy. This is not an offer or a solicitation to buy or sell securities. This may not be construed as investment advice and does not give investment recommendations. Any opinion included in this article constitutes the judgment of CMH Wealth Management, LLC as of the date of this report and are subject to change without notice. 

Additional information, including management fees and expenses, is provided on CMH Wealth Management, LLC’s Form ADV Part 2. Past performance is not a guarantee of future results.

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