Federal Income Tax Brackets 2022

Federal Income Tax Brackets 2022 and Tax Estimator

Federal Income Tax Brackets 2022 for the tax for taxes due in April 2023 or in October 2023 with an extension. There are 7 tax brackets and 7 tax rates for each type of filing status.

Understanding these tax brackets and tax rates will help you easily define your tax liability or refund for the financial year 2022.

What are Tax Brackets?

Every year, IRS announces multiple tax brackets based on which a US citizen or alien pays his income tax. Tax Brackets are multiple ranges of taxable income on which the tax rates are applicable and the filer calculates the income tax.

Tax Brackets for Single, Married Filing Separately, Married Filing Jointly, and Head of House Hold are different.

What Are Tax Rates?

Tax Rates means the percentage on which IRS charges the income tax for different filing status. Different Tax Rates apply to different income categories.

Moreover, individuals having lower taxable income have to pay income tax on lower tax rates. The lowest tax rate is 10% and the highest tax rate is 37%.

What is Taxable Income?

The formula to calculate Taxable Income is as follows:

Taxable Income = Gross Income – Adjustments – Deductions – Exemptions

You can use our ready-to-use Federal Income Tax Calculator to compute your taxable income.

Federal Income Tax Calculator 2022

Gross Income

Gross income includes income from the following sources:

  • Wages
  • Dividends
  • Capital gains
  • Business income
  • Retirement distributions
  • Interest or returns from Investment
  • Other income from side hustles

Adjustments to Derive Adjusted Gross Income (AGI)

IRS allows some initial deductions to adjust your income. The income after the deduction of adjustments is called Adjusted Gross Income or AGI.

Adjustments include the following:

  • Educator expenses.
  • IRA deduction.
  • Student loan interest deduction.
  • Tuition and fees deduction.
  • Health savings account deduction.
  • Moving expenses.
  • 50% of self-employment tax.
  • Self-employed Health Insurance Deduction.
  • Other Self-Employed Plans (SEP, SIMPLE, etc).
  • Penalties paid for early withdrawal of savings.
  • Alimony paid.

Deductions

There are two types of deductions: Standard Deductions and Itemized Deductions. The taxpayer can choose between both. Usually, filers having low income opt for Standard Deductions as it allows them to get more deductions.

Standard Deduction for Federal Income Tax 2022:

Single Filer & Married Filing Separately: $12,950.

Married Filing Jointly: $25,900.

Head of Household: $19,400.

Itemized Deductions are a sort of Allowable Deduction in the federal income tax system that considers actual costs rather than a predetermined amount of the Standard Deduction.

Itemized Deductions for Federal Income Tax 2022:

  • Medical and dental expenses, as well as some medical insurance premiums, surpass 7.5% of your AGI
  • State and Local Income Taxes.
  • Local and State Sales Taxes
  • Property taxes on real estate.
  • Personal Property Taxes are a type of property tax that is imposed on individuals. (For example, automobile registration fees)
  • Mortgage interest rates.
  • Interest on investments is paid. (For example, margin interest)
  • Donations to Charities and Churches in Cash
  • Losses incurred as a result of a catastrophe or theft.
  • Employee costs that are not repaid by your employer.
  • Tax preparation fees paid.
  • Gaming losses are proportional to gambling wins.

Every year there is a limit for itemized deductions. Earlier, the amount of itemized deductions that taxpayers with AGIs over a threshold could claim was restricted.

These restrictions known as the Pease limitations are postponed by the TCJA from 2018 to 2025.

Exemptions

Tax exemptions are a type of deduction that the IRS provides to all federal income tax filers. These tax exemptions, like allowable deductions, lower your taxable income.

Taxpayers sometimes overlook these tax exemptions and end up paying extra taxes. Knowing about these exemptions might help you lower your tax bill.

Every year, the IRS adjusts the tax exemption amount for inflation. On their tax returns, every taxpayer has the right to seek an exemption.

Federal Income Tax Brackets 2022

Given below are the Federal Income Tax Brackets as well as Tax Rates for the year 2022 based on the filing status.

Federal Income Tax Brackets 2022 For Single Filers

Tax rate 2022

Taxable Income Brackets 2022

Tax Liability 2022

10%

$0 to $10,275

10% of taxable income between $0 to $9,950

12%

$10,276 to $41,775

$1,027.5 + 12% of the amount above $10,275 upto $41,775

22%

$41,776 to $89,075

$4,807.50 + 22% of the amount above $41,776 upto $89,075

24%

$89,076 to $170,050

$15,213.50 + 24% of the amount above $89,076 upto $170,050

32%

$170,051 to $215,950

$34,647.50 + 32% of the amount above $170,051 upto $215,950

35%

$215,951 to $539,900

$49,335.50 + 35% of the amount over $215,951 upto $539,900

37%

$539,901 or more

$162,718 + 37% of the amount above $539,901

Federal Income Tax Brackets 2022 For Married Filing Separately

Tax rate 2022

Taxable Income Brackets 2022

Tax Liability 2022

10%

$0 to $10,275

10% of taxable income between $0 to $9,950

12%

$10,276 to $41,775

$1,027.5 + 12% of the amount above $10,275 upto $41,775

22%

$41,776 to $89,075

$4,807.50 + 22% of the amount above $41,776 upto $89,075

24%

$89,076 to $170,050

$15,213.50 + 24% of the amount above $89,076 upto $170,050

32%

$170,051 to $215,950

$34,647.50 + 32% of the amount above $170,051 upto $215,950

35%

$215,951 to $539,900

$49,335.50 + 35% of the amount over $215,951 upto $539,900

37%

$539,901 or more

$162,718 + 37% of the amount above $539,901

Federal Income Tax Brackets 2022 For Married Filing Jointly

Tax rate 2022

Taxable income bracket 2022

Tax Liability 2022

10%

$0 to $20,550

10% of taxable income

12%

$20,551 to $83,550

$2,055 + 12% of the amount above $20,551 up to $83,550

22%

$83,551 to $178,150

$9,615 + 22% of the amount above $83,551 up to $178,150

24%

$178,151 to $340,100

$30,427 + 24% of the amount above $178,151 up to $340,100

32%

$340,101 to $431,900

$69,295 + 32% of the amount above $340,101 up to $431,900

35%

$431,901 to $647,850

$98,671 + 35% of the amount above $431,901 upto $647,850

37%

$647,851 or more

$174,253.50 + 37% of the amount above $647,851

Federal Income Tax Brackets 2022 For Head of the Household

Tax rate 2022

Taxable income bracket 2022 Tax Liability 2022

10%

$0 to $14,650

10% of taxable income

12%

$14,651 to $55,900

$1,465 + 12% of the amount above $14,650

22%

$55,901 to $89,050

$6,415 + 22% of the amount above $55,900

24%

$89,051 to $170,050

$13,708 + 24% of the amount above $89,050

32%

$170,051 to $215,950

$33,148 + 32% of the amount above $170,050

35%

$215,951 to $539,900

$47,836 + 35% of the amount above $215,950

37%

$539,901 or more

$161,218.50 + 37% of the amount above $539,900

Source: www.IRS.gov

Tax Credits 2022

Once you have calculated your taxable income and applicable tax liability you can reduce the amount by taking available tax credits from the IRS.

These include:

  • Adoption Tax Credit
  • Child Tax Credit
  • Earned Income Credit
  • Education Credits
  • Foreign Tax Credit
  • Credit for Child and Dependent care expenses
  • Credit for the Elderly and Disabled.
  • Residential energy credit.
  • Electric vehicle tax credit.

Additional Credits for Federal Income Tax 2022 Due To COVID-19

Here are a few exclusive credits available in 2022.

Employee Retention Credit

In the past 2 years, businesses had to mandatorily shut down operations during COVID-19. As a result, the US government introduced Coronavirus Aid, Relief, and Economic Security Act hereafter referred to as CARES Act.

This credit entitles the businesses to a refundable payroll tax credit for qualified wages paid to retained full-time employees.

ERC is a completely refundable credit that applies to the employee’s Social Security taxes. This implies that the credit will be treated as an overpayment, and you will get a refund after deducting your portion of the taxes.

In other words, if your credit in any quarter exceeds your entire Social Security liability, the difference will be repaid to you.

Therefore, to claim the new Employee Retention Credit (if eligible), total qualifying salaries and related health insurance expenditures for each quarter must be calculated and subtracted from your Form 941.

We have created an Employee Retention Credit Calculator with predefined formulas and functions. This template helps calculate ERC for each quarter of 2021.

Employee Retention Credit Calculator

Click on the link below to download the template:

Employee Retention Credit Calculator 2021

The Employee Retention Credit date was extended from 12/31/21 to 9/30/2021. But, you can file retroactively, if you meet the eligibility requirements.

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Disclaimer: This article is for educational purposes only and shall not be considered tax advice. Kindly consult a CPA or tax consultant.

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