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WELCOME TO 2022...HAPPY NEW TAX YEAR


It's 2022 and if you haven't started tax planning for the year then you're already behind the 8 ball. However it's never too late, get started TODAY....


Here are some tax updates for filing your 2021 tax return


  • INCOME TAX BRACKETS

For the 2021 tax year, there are seven federal tax brackets:

10%, 12%, 22%, 24%, 32%, 35% and 37%

Your filing status and taxable income (such as your wages) will determine what bracket you're in.

  • FILING STATUS STANDARD DEDUCTIONS

Standard Deduction 2021 2022

Single; Married Filing Separately $12,550 $12,950

Married Filing Jointly & Surviving Spouses $25,100 $25,900

Head of Household $18,800 $19,400


For dependents who only have unearned income is $1,100

If the dependent has both earned and unearned income, the standard deduction is the greater of $1,100 or their earned income plus $350, but not more than the basic standard deduction for their filing status.


  • ITEMIZED DEDUCTIONS

Medical expense deduction is limited permanently to 7.5% of AGI regardless of age.


  • ADOPTION CREDIT

Maximum nonrefundable credit increased to $14,440 and begins to phase out when MAGI exceeds $216,660

  • CHILD TAX CREDIT

For 2021 ONLY, the credit includes 17 year olds and is increased from $2,000 per eligible child to:

$3,600 for each child under age 6

$3,000 for each child age 6 to 17


Phase out is as follows:

$75,000 for single

$112,500 for Head of Household

$150,000 for MFJ and QW

  • CHILD AND DEPENDENT CARE CREDIT

For 2021, this credit is fully refundable and the dollar limit for eligible expenses increases from:

$3,000 to $8,000 for one eligible child

$6,000 to $16,000 for two or more eligible children

  • EARNED INCOME TAX CREDIT

CHILDREN MAXIMUM CREDIT MAXIMUM EARNINGS

Single Married

Childless $543 $15,980 $21,920

One Child $3,618 $42,158 $48,108

Two Children $5,980 $47,915 $53,865

Three or More Children $6,728 $51,464 $57,414

  • STANDARD MILEAGE RATES

$0.56 BUSINESS MILEAGE

$0.16 MEDICAL OR MOVING MILEAGE

$0.14 CHARITY

$0.26 DEPRECIATION COMPONENT

  • LUXURY AUTOMOBILE DEPRECIATION LIMITS (purchased after 9/27/17)

First year - 2021 $10,200

First year w/bonus $18,200

Second year $16,400

Third year $9,800

Succeeding years $5,860

  • IRS SECTION 179

Taxpayers may expense up to $1,050,000 of qualifying property acquired for use in a trade or business. The SUV limit is $26,200

  • SOCIAL SECURITY

Maximum wages subject to Social Security tax is $142,800

  • GIFT TAX EXCLUSION

The annual gift tax exclusion is $15,000 per person

The annual exclusion for a spouse who is not a citizen of the US is $159,000

  • CORPORATE TAX RATE

Federal corporate income tax rate is 21%


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