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The IRS Has Released New Tax Brackets. Here’s What You Need to Know.

If you are concerned about tax season every year, you are not alone. I loathe tax season.

Well, you should know that as of yesterday, The IRS Has Released New Tax Brackets. Here’s What You Need to Know.

New IRS Tax Brackets

Due to the inflation of costs, the IRS decided to make some changes to the tax brackets for 2022.

The updates are for individual income tax brackets to adjust for inflation. While the tax rates themselves haven’t changed, the income amounts defining them have.

For married couples filing jointly, the proposed 2022 rates work out as follows:

IncomeTax
Up to $20,55510% of taxable income
$20,551–$83,550$2,055 plus 12% of the excess over $20,550
$83,551–$178,150$9,615 plus 22% of the excess over $83,550
$178,151–$340,100$30,427 plus 24% of the excess over $178,150
$340,101–$431,900$69,295 plus 32% of the excess over $340,100
$431,901–$647,850$98,671 plus 35% of the excess over $431,900
$647,851 plus$174,253.50 plus 37% of the excess over $647,850

If you’re single, here’s how things shake out for the new tax plan:

IncomeTax
Up to $10,27510% of taxable income
$10,276–$41,775$1,027.50 plus 12% of the excess over $10,275
$41,776–$89,075$4,807.50 plus 22% of the excess over $41,775
$89,076–$170,050$15,213.50 plus 24% of the excess over $89,075
$170,051–$215,950$34,647.50 plus 32% of the excess over $170,050
$215,951–$539,900$49,335.50 plus 35% of the excess over $215,950
$539,901 plus$162,718 plus 37% of the excess over $539,900

Heads of household will face these brackets:

IncomeTax
Up to $14,65010% of taxable income
$14,651–$55,900$1,465 plus 12% of the excess over $14,650
$55,901–$89,050$6,415 plus 22% of the excess over $55,900
$89,051–$170,050$13,708 plus 24% of the excess over $89,050
$170,051–$215,950$33,148 plus 32% of the excess over $170,050
$215,951–$539,900$47,836 plus 35% of the excess over $215,950
$539,901 plus$161,218.50 plus 37% of the excess over $539,900

And married individuals filing separate returns can expect to face these rates:

IncomeTax
Up to $10,27510% of taxable income
$10,276–$41,775$1,027.50 plus 12% of the excess over $10,275
$41,776–$89,075$4,807.50 plus 22% of the excess over $41,775
$89,076–$170,050$15,213.50 plus 24% of the excess over $89,075
$170,051–$215,950$34,647.50 plus 32% of the excess over $170,050
$215,951–$323,925$49,335.50 plus 35% of the excess over $215,950
$323,926 plus$87,126.75 plus 37% of the excess over $323,925

Beyond brackets, the standard deduction is adjusting next year to account for rising prices, increasing $800 to $25,900 for married couples filing jointly and up $400 to $12,950 for single taxpayers and married individuals filing separately. Heads of households will see a $400 increase in the standard deduction to $19,400.

If you qualify for a health savings account, you can add a little more starting 2022 too.

The individual limit for annual contributions has been raised to $4,950, a $150 increase, and the family plan max has jumped $250 to $7,400.

So, if you are wanting to plan for the year ahead, this is a great way to do so.

You can read more about the IRS tax bracket changes here.