Now that we are past the 2021 tax deadline we wanted to get some information out about the rates and changes for 2022.

You can download our full 2022 Tax Resource Guide here.

Below is the breakdown of some of the most important ones!

2022 Individual Tax Rates

For our purposes we are going to focus on single and married filed jointly as those are the two we see the most but again you can download our full resource guide for more options.

There are 7 different tax rates based on income. Those rates are 10%, 12%, 24%, 32%, 35%, and 37%.

• Single Tax Rates (on Ordinary Taxable Income)
  • 10%: $10,275 and Under
  • 12%: $10,275 – $41,775
  • 22%: $41,775 – $89,075
  • 24%: $89,075 – $170,050
  • 32%: $170,050 – $215,950
  • 35%: $215,950 – $539,900
  • 37%: Over $539,900
• Married Filing Jointly Tax Rates (on Ordinary Taxable Income)
  • 10%: $20,550 and Under
  • 12%: $20,550 – $83,550
  • 22%: $83,550 – $178,150
  • 24%: $178,150 – $340,100
  • 32%: $340,100 – $431,900
  • 35%: $431,900 – $647,850
  • 37%: Over $647,850

Just a reminder on how tax brackets work. You only pay tax rate for the amount in that specific bracket. As an example, lets say your income was $100,000 and you are single. Your rate would be calculated at:

• 10% of $10,275: $1,027.50
• 12% of $10,275 – $41,775: $3,780.00
• 22% of $41,775 – $89,075: $10,406.00
• 24% of $89,075 – $100,000: $2,622.00
• TOTAL: $17,835.50

2022 Business Tax Rates

On a federal level most businesses are pass through entities which means you pay the tax on your personal side and there is no direct tax at the business entity level. There is one exception to that, the C Corporation.

C Corporation Tax Rate

• Any Amount of Income: 21%

We have two additional resources that can help explain businesses taxes:

• What Do I Need To Know About Taxes As A Business Owner?
• What is a Pass Through Entity?

2022 Social Security and Medicare Tax Rates

• Social Security Tax Rate (Up to $147,000)
  • EmployEE: 6.2%
  • EmployER: 6.2%
• Medicare Tax Rate
  • EmployEE: 1.45%
  • EmployER: 1.45%
  • Add 0.9% once income hits $200k (Single) or $250k (Married)

2022 Capital Gain Tax Rates

First we need to look at holding periods to determine the type of capital gain:

• Short-Term Capital Gain: Held for 1 year or less
• Long-Term Capital Gain: Held for more than 1 Year

Now lets look at the rates for each:

• Short-Term Capital Gain
  • Taxed at Ordinary Income Tax Rates Mentioned Above (up to 37%)
• Long-Term Capital Gain
  • Single
    • 0%: Under $41,675
    • 15%: $41,675 – $459,750
    • 20%: Over $459,750
  • Married Filing Jointly
    • 0%: Under $83,350
    • 15%: $83,350 – $517,200
    • 20%: Over $517,200

2022 Standard Deduction

Note if you have itemized deductions over the standard deduction then you will take those instead.

• Single: $12,950
• Married Filing Jointly: $25,900

2022 Retirement Plans

Individual IRA Plans

• Contribution Amounts 
  • Traditional and Roth: $6,000 + $1,000 (50 and Older)
  • Coverdell “Educational” IRA: $2,000
• Deductibility Phase-Out
  • Participants in Employer Plans
    • Single: $68,000 – $78,000
    • Married Filing Jointly: $109,000 – $129,000
  • Nonparticipants in Employer Plans
    
    • Nonparticipant married to a participant: $204,000 – $214,000
    • Neither spouse a participant: Fully Deductible
  • Roth IRA Contribution Phase-Out
    • Single: $129,000 – $144,000
    • Married Filing Jointly: $204,000 – $214,000
  • Coverdell IRA Contribution Phase-Out
    • Single: $95,000 – $110,000
    • Married Filing Jointly: $190,000 – $220,000

Business Retirement Plans

• SEP IRA
  • Max EmployER Contribution
    • 25% of W2 Wages, or
    • 20% of Net Self Employment Income
    • Max of $58,000
• SIMPLE IRA
  • Max EmployEE Contribution
    • $14,000 ($17,000 if 50+)
• 401(k)
  • Max EmployEE Contribution
    • $20,500 ($27,000 if 50+)
  • Max EmployER Contribution
    • 25% of Wages
  • Combined Maximum of employEE and employER contributions is $61,000 ($67,500 if 50+)

We did a whole series on retirement plans last year and also did a refresher earlier this year that you can find here:

What Retirement Plan Options Are Available For My Business in 2022?

2022 Vehicle Deductions

• 2022 Standard Mileage Rates
  • Business: 58.5 cents per Mile
  • Charitable: 14.0 cents per Mile
  • Medical & Moving: 18.0 cents per Mile
• Depreciation Limits for Vehicles Under 6,000lbs
  •  Note: 2022 numbers are not yet released so these are the numbers from 2021.
  • Year 1: $10,200 ($18,200 w/ Bonus Depreciation) 
  • Year 2: $16,400
  • Year 3: $9,800
  • Each Succeeding Year: $5,860

We had a previous article digging deeper on automobile expensing and depreciation here:

What Do I Need to Know About Purchasing, Deducting, and Depreciating a Business Vehicle?

2022 Medical Expense

• Health Savings Account Max Contribution
  • Self Only: $3,650
  • Family: $7,300
  • $1,000 Catch up if 55-65
• High Deductible Health Plan Minimum Deductible
  • Self Only: $1,400
  • Family: $2,800
• High Deductible Health Plan Max Out of Pocket
  • Self Only: $7,050
  • Family: $14,100

At the end of last year we did a mini series on healthcare related items that you can find here:

• How Does the Deduction For Self-Employed Health Insurance Work?
• What Is An HSA and How Do They Work?
• What Options Are Available to Business Owners With High Medical Costs?
• What Health Benefit Options are Available for Small Businesses With Employees?

As always if you want more information on how to combat these taxes and lower your overall tax rates, check out our Tax Minimization Program!

Do not forget to download our 2022 Tax Resource Guide here!