Tax Facts – 2 Year Comparison
Here’s a quick review of some of the tax changes you’ll see from 2021 to 2022 as a result of inflation adjustments and new tax laws.
| Provision | 2021 | 2022 | +/- |
| Business equipment Sec. 179 expensing deduction | $1,050,000 | $1,080,000 | +$30,000 |
| Total purchase limit for full Sec. 179 expensing deduction | $2,620,000 | $2,700,000 | +$80,000 |
| Standard mileage rate: business | 56¢ per mile | 58.5¢ per mile | +2.5¢ |
| Standard mileage rate: medical/moving | 16¢ per mile | 18¢ per mile | +2.0¢ |
| Mileage rate: charitable activity | 14¢ per mile | 14¢ per mile | nc |
| Maximum wages subject to social security tax | $142,800 | $147,000 | +$4,200 |
Social security earnings limit | |||
| – Under full retirement age | $18,960 | $19,560 | +$600 |
| – Full retirement age | No limit | No limit | nc |
| Top estate tax rate | 40% | 40% | nc |
| Estate tax exemption | $11,700,000 | $12,600,000 | +$900,000 |
| Annual gift tax exclusion (per donee) | $15,000 | $16,000 | +$1,000 |
Alternative minimum tax exemption | |||
| – Single | $73,600 | $75,900 | +$2,300 |
| – Married, joint | $114,600 | $118,100 | +$3,500 |
| – Married, separate | $57,300 | $59,050 | +$1,750 |
Maximum retirement plan contributions | |||
| – IRA for those under age 50 | $6,000 | $6,000 | nc |
| – IRA for those 50 and over | $7,000 | $7,000 | nc |
| – SIMPLE plan for those under age 50 | $13,500 | $14,000 | +$500 |
| – SIMPLE plan for those 50 and over | $16,500 | $17,000 | +$500 |
| – 401(k) plan for those under age 50 | $19,500 | $20,500 | +$1.000 |
| – 401(k) plan for those 50 and over | $26,000 | $27,000 | +$1.000 |
HSA contribution limits | |||
| – Self only | $3,600 | $3,650 | +$50 |
| – Family | $7,200 | $7,300 | +$100 |
| – Additional for 55 & older | $1,000 | $1,000 | nc |
| “Kiddie tax” threshold | $2,200 | $2,300 | +$100 |
| “Nanny tax” threshold | $2,200 | $2,400 | +$200 |
| Education savings account contribution (Coverdell) | $2,000 | $2,000 | nc |
| American opportunity (Hope) credit limit | $2,500 | $2,500 | nc |
| Education loan interest deduction | $2,500 | $2,500 | nc |
| Personal exemption (suspended through 2025) | Suspended | Suspended | na |
| FICA & self-employment tax | |||
| Taxable wages for Social Security/Medicare | Up to $142,800 | Up to $147,000 | +$4,200 |
Social Security/Medicare tax rate | |||
| – Employees | 7.65% | 7.65% | nc |
| – Employers | 7.65% | 7.65% | nc |
| – Self-employed | 15.3% | 15.3% | nc |
Standard deduction | |||
| – Single | $12,550 | $12,950 | +$400 |
| – Joint returns & surviving spouses | $25,100 | $25,900 | +$800 |
| – Married filing separately | $12,550 | $12,950 | +$400 |
| – Head of household | $18,800 | $19,400 | +$600 |
| – Additional for elderly or blind (married) | $1,350 | $1,400 | +$50 |
| – Additional for elderly or blind (single) | $1,700 | $1,750 | +$50 |
As always, please feel free to contact us should you have any questions or concerns regarding your tax situation. Stay Up To Date on taxes that affect you!! Subscribe to our Client Newsletter today to receive informative tips and updates on tax and financial changes. Follow CD Tax on Facebook!
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