Frequently Asked Questions
What are the changes coming in 2022 due to the tax reform law?
The standard deduction for married couples filing jointly for tax year 2022 rises to $25,900 up $800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, up $400, and for heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.
Marginal Rates: For tax year 2022, the top tax rate remains 37% for individual single taxpayers with incomes greater than $539,900 ($647,850 for married couples filing jointly).
The other rates are:
*35%, for incomes over $215,950 ($431,900 for married couples filing jointly);
*32% for incomes over $170,050 ($340,100 for married couples filing jointly);
*24% for incomes over $89,075 ($178,150 for married couples filing jointly);
*22% for incomes over $41,775 ($83,550 for married couples filing jointly);
*12% for incomes over $10,275 ($20,550 for married couples filing jointly).
*The lowest rate is 10% for incomes of single individuals with incomes of
$10,275 or less ($20,550 for married couples filing jointly).
For 2022, as in 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
The Alternative Minimum Tax exemption amount for tax year 2022 is $75,900 and begins to phase out at $539,900 ($118,100 for married couples filing jointly for whom the exemption begins to phase out at $1,079,800). The 2021 exemption amount was $73,600 and began to phase out at $523,600 ($114,600 for married couples filing jointly for whom the exemption began to phase out at $1,047,200).
The tax year 2022 maximum Earned Income Tax Credit amount is $6,935 for qualifying taxpayers who have three or more qualifying children, up from $6,728 for tax year 2021. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
For tax year 2022, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $280.
For the taxable years beginning in 2022, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $2,850. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $570, an increase of $20 from taxable years beginning in 2021.
For tax year 2022, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,450, up $50 from tax year 2021; but not more than $3,700, an increase of $100 from tax year 2021. For self-only coverage, the maximum out-of-pocket expense amount is $4,950, up $150 from 2021. For tax year 2022, for family coverage, the annual deductible is not less than $4,950, up from $4,800 in 2021; however, the deductible cannot be more than $7,400, up $250 from the limit for tax year 2021. For family coverage, the out-of-pocket expense limit is $9,050 for tax year 2022, an increase of $300 from tax year 2021.
The modified adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit provided in § 25A(d)(2) is not adjusted for inflation for taxable years beginning after December 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).
For tax year 2022, the foreign earned income exclusion is $112,000 up from $108,700 for tax year 2021.
Estates of decedents who die during 2022 have a basic exclusion amount of $12,060,000, up from a total of $11,700,000 for estates of decedents who died in 2021.
The annual exclusion for gifts increases to $16,000 for calendar year 2022, up from $15,000 for calendar year 2021.
The maximum credit allowed for adoptions for tax year 2022 is the amount of qualified adoption expenses up to $14,890, up from $14,440 for 2021.
Is there an age limit on claiming my child as a dependent?
To claim your child as your dependent, your child must meet either the qualifying child test or the qualifying relative test. To meet the qualifying child test, your child must be younger than you and either younger than 19 years old or be a “student” younger than 24 years old as of the end of the calendar year. There’s no age limit if your child is “permanently and totally disabled” or meets the qualifying relative test. In addition to meeting the qualifying child or qualifying relative test, your child must also meet all of the other tests for claiming a dependent. For example the dependent taxpayer test, citizen or resident test, and joint return test.
How much income can an unmarried dependent student make before they have to file an income tax?
An unmarried dependent student must file a tax return if his or her earned or unearned income exceeds certain limits. To find these limits, refer to Dependents under Who Must File, in Publication 501, Exemptions, Standard Deduction, and Filing Information. Even if you don’t have to file a federal income tax return, you should file if you can get money back (for example, you had federal income tax withheld from your pay or you qualify for a refundable tax credit). See Who Should File in Publication 501, for more examples.
To qualify for head of household filing status, do I have to claim my child as a dependent?
Generally, to qualify for head of household, you must have a qualifying child or dependent. However, a custodial parent may be able to claim head of household filing status with a qualifying child even if he or she released a claim to exemption for the child. See Noncustodial parent is claiming an exemption for my child; do I still qualify as head of household?
What should I do if I made a mistake on my federal return that I've already filed?
It depends on the type of mistake you made. Many mathematical errors are caught during the processing of the tax return and corrected by the IRS, so you may not need to correct these mistakes. If you didn’t claim the correct filing status or you need to change your income, deductions, or credits, you should file an amended or corrected return using Form 1040X, Amended U.S. Individual Income Tax Return. When filing an amended or corrected return Include copies of any forms and/or schedules that you’re changing or didn’t include with your original return. To avoid delays, file Form 1040X only after you’ve filed your original return. Generally, for a credit or refund, you must file Form 1040X within 3 years after the date you timely filed your original return or within 2 years after the date you paid the tax, whichever is later. Allow the IRS up to 16 weeks to process the amended return.
What is a split refund?
A split refund lets you divide your refund, in any proportion you want, and direct deposit the funds into up to three different accounts with U.S. financial institutions. Use Form 8888, Allocation of Refund (Including Savings Bond Purchases), to request to have your refund split or to use part or all of your refund to buy up to $5,000 in paper or electronic U.S. Series I Savings Bonds for yourself or someone else.
How do I know if I have to file quarterly individual estimated tax payments?
You must make estimated tax payments for the current tax year if both of the following apply: You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits. You expect your withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your current year’s tax return, or 100% of the tax shown on your prior year’s tax return (must cover all 12 months).
What are the tax changes for this year?
For highlights of the tax changes for the current tax year, refer to the “What’s New” section of the following: Individuals – Instructions for Form 1040, Instructions for Form 1040A, or Instructions for Form 1040EZ; Businesses – Publication 15 (Circular E), Employer’s Tax Guide, or the instructions of your current business tax forms.