With the new year underway, it’s time to turn our attention to another annual milestone — Tax Day. To help, I thought I'd provide an abridged tax guide so you can know exactly what to expect as you prepare to file.
The big picture is this: When it comes to the 2022 tax year, it’s pretty clear it’s the year of the reset. The IRS rolled out many credits, increases, and stimulus payments in 2020 and 2021 to help taxpayers weather the pandemic and its subsequent fallout.
Now, provisions like the child tax credit, the earned income tax credit, and the child and dependent care credit are reverting back to their pre-pandemic parameters. That said, here are 22 questions — and answers — about the 2022 tax year.
General Tax Questions
1. When is the deadline for filing taxes this year?
The deadline for filing taxes is Tuesday, April 18, 2023.
2. What are the tax rates and brackets for 2022?
2022 Marginal Tax Rates |
Single Filer |
Married Filing Jointly |
Head of Household |
Married Filing Separately |
10% |
$0–10,275 |
$0–20,550 |
$0-14,650 |
$0-10,275 |
12% |
$10,276-41,775 |
$20,551–83,550 |
$14,651-55,900 |
$10,276-41,775 |
22% |
$41,776-89,075 |
$83,551–178,150 |
$55,901-89,050 |
$41,776-89,075 |
24% |
$89,076–170,050 |
$178,151–340,100 |
$89,051-170,050. |
$89,076-170,050 |
32% |
$170,051–215,950 |
$340,101–431,900 |
$170,051-215,950 |
$170,051-215,950 |
35% |
$215,951–539,900 |
$431,901–647,850 |
$215,951-539,900 |
$215,951-323,925 |
37% |
Over $539,901 |
Over $647,851 |
Over $539,901 |
Over $323,926 |
3. How do tax brackets work?
Here’s a quick review:
The tax bracket that the highest dollar of your income falls into is called your marginal tax rate. But because of the U.S. tax system, your tax liability isn’t simply your marginal rate multiplied by your taxable income. The rate you pay is your effective tax rate. Here’s a real-life example that shows how it works:
Let’s say Kelly is a single filer with $50,000 in taxable income.
Kelly’s marginal tax rate is 22%. But once she runs the calculations, Kelly will pay around 12% of her income. This is her effective tax rate, equal to about $6,000.
4. What is the standard deduction for 2022?
For 2022, the standard deduction has increased slightly to adjust for inflation.
Filing Status |
2021 |
2022 |
Single |
$12,550 |
$12,950 |
Married Filing Jointly |
$25,100 |
$25,900 |
Married Filing Separately |
$12,550 |
$12,950 |
Head of Household |
$18,800 |
$19,400 |
*Note that if you are age 65 or older or blind, your standard deduction is higher. If you fall into one of these categories, your standard deduction is increased by $1,750 if you’re single or $1,400 if you’re married.
5. Should I itemize or take the standard deduction?
The option you choose depends on the one that will maximize your tax benefits. Taxpayers usually claim the option that lowers their tax bill the most. You get to decide which is better for you each year.
The standard deduction allows you to deduct the set amount from your taxes, no questions asked. If you plan to itemize, you’ll need documentation to verify your qualifying expenses from a list approved by the IRS.
6. What is a tax credit, and which ones should I take?
A tax credit is the amount of money you're permitted to subtract, dollar for dollar, from any income taxes you owe. Here are seven of the most common ones:
7. Are there any deductions for student loan interest?
Yes. You may be able to deduct up to $2,500 of student loan interest paid in 2022. Keep in mind the credit amount is gradually reduced if your modified AGI reaches a certain threshold.
8. What are the standard mileage rates for 2022?
The 2022 standard mileage rate for business driving from January 1 to June 30 is 58.5¢. Effective July 1 through December 31, 2022, the IRS raised the mileage rate to 62.5¢.
9. What are the medical travel and military mileage rates for 2022?
The mileage rate for medical travel and military moves is 18¢ for the first six months of 2022 and 22¢ for July through December.
Retirement Tax Questions
10. What are the retirement plan contribution limits for 2022?
2022 Retirement Plan Contribution Limits and Catch-Up Contributions:
11. What about required minimum distributions (RMDs) for 2022?
The IRS updated the table used to calculate required minimum distributions (RMDs) to account for longer life expectancies beginning in 2022. See the updated table here.
12. Are there any tax breaks for senior adults and retirees?
Yes! Here are a few to look for:
Miscellaneous Tax Questions
13. What are the lifetime estate and gift tax exemptions for 2022?
The lifetime estate exemption for 2022 jumped from $11.7 million to $12.06 million ($24.12 million for couples).
The gift tax exclusion rose to $16,000 per recipient. This means you can give up to $16,000 to each child, grandchild, or any other person in 2022. So long as you stay below the limit, neither you nor your recipient will be required to file a gift tax return or tap the lifetime estate and gift tax exemption.
14. What are the capital gain rates for 2022?
Remember, if you sold stocks, mutual funds, or other capital assets that you held for at least one year, any gain is taxed at a 0%, 15%, or 20% rate.
The 0% rate applies to those with taxable income:
The 15% rate applies to those with taxable income:
The 20% rate applies to those with taxable income:
You can get a general idea of your after-tax investment gains with a capital gains calculator.
15. What is the Residential Clean Energy Credit?
The Inflation Reduction Act, signed into law on August 16, 2022, renamed the former Residential Energy Efficient Property Credit to the Residential Clean Energy Credit. For 2022, the credit amount was increased to 30% from 26% in 2021. The credit can offset the cost of installing electric, water heating, or temperature control systems in homes that use solar, wind, geothermal, biomass, or fuel cell power.
16. Are HSA contributions tax-deductible? What else has changed with HSAs?
Yes! The contributions to an HSA are tax-deductible, and the earnings (if invested) are tax-free, as are withdrawals foreligible medical expenses. You report your contributions on Form 8889 with the total contributions transferred to and reported on your Form 1040.
HSA funds, flexible spending arrangements (FSAs), and health reimbursement arrangements (HRAs) can purchase over-the-counter medicines without a doctor's prescription.
17. Are charitable contributions eligible for a tax deduction in 2022?
Any contribution—of cash or non-cash assets—received by December 31, 2022, is eligible for a tax deduction. Generally, you may deduct up to 50% of your AGI. Keep in mind that charitable contributions are only deductible if you are itemizing.
18. Are there any tax deductions for teachers in 2022?
Yes! Teachers and other educators who pay out of pocket for books, supplies, and other materials used in the classroom can deduct up to $300 for these expenses.
19. What’s changing this year with platforms like Paypal and Venmo?
It turns out, nothing. The IRS previously announced that payment platforms like Venmo and Paypal would be required to send Form 1099-K to anyone who earned $600 or more on the platform in 2022. On December 23, the IRS reversed course for the 2022 tax year, reverting to the previous requirement that platforms provide 1099-Ks to those who earned at least $20,000 from 200-plus transactions on the platform.
This is not a cancellation of the new requirement, but a delay for the 2022 tax year. Reach out if you have any questions at all about this.
Just-for-Fun Tax Deductions
20. Can clarinet lessons for my child reduce my taxes?
Why, yes, they can! It’s true. Clarinet lessons for your son or daughter can qualify as a medical expense because they may help correct a misaligned bite. Lessons might also qualify as dependent care expenses if they happen outside the normal school day.
21. Can I deduct the cost of my backyard swimming pool?
If you have a medical condition like arthritis that doctors believe could be helped by regular time in the water, you may be able to write off the cost of putting in a pool.
22. Do summer camp expenses for my child qualify me for the child and dependent care credit?
Yes! If you are single and working or married and both you and your spouse work, the costs of day camp during the summer generally count as expenses toward the child and dependent care credit.
I hope this guide was helpful — and maybe a tad amusing. Feel free to share it with others, and as you shift into high gear with your 2022 tax return, don’t hesitate to reach out if you have questions, no matter how small. We’re here to make this tax season easy, efficient, and headache-free.
We are accepting new tax clients for 2022. Schedule a complimentary tax call. Schedule Online
As we move towards tax season, I wanted to get a jump on sharing a few IRS tax updates for 2022, so you can plan accordingly. The theme almost entirely across the board? Brackets, limits, and thresholds are increasing for 2022.
As you read over these changes, let me know if you have questions or would like to know if/how they apply to you. I’m here to find ways to help you save and pay no more than you need to this tax year and always.
I hope you found this information helpful. If nothing else, you’re better prepared than most to finish out the year strong from a tax perspective.
As always, if we can be of assistance to you, please reach out anytime—that’s why we’re here.
We are accepting new tax clients for 2022. Schedule a complimentary tax call. Schedule Online
Mendoza & Company, Inc. is a full-service accounting, Payroll, and Tax Resolution firm in Bethesda, MD and Miami, FL. As a client, you gain a professional team with expertise in multiple fields, providing you the right advice to strengthens your organization and long-term goals.