2022 Tax Changes: What You Need to Know

There have been a number of changes this year that are going to have an impact on your tax return. You will see some differences due to the end of many pandemic relief measures and changes made to account for inflation. Here is an overview of what you can expect: 

Shifted Income Tax Brackets

While tax rates remain the same, the income ranges for each bracket were adjusted for inflation. With these shifts, a larger portion of your income will be taxed at lower rates. Barring any significant changes in income or withholding from the 2021 season, the overall amount of tax owed will likely decrease as a result of these shifts.

Increased Standard Deductions

The standard deduction for single filers increased by $400 to $12,950, while joint filers will see an $800 increase to $25,900 for the 2022 tax year. Head of Household filers will also see an increase to $19,400. Overall this will lower the total tax due for those not itemizing deductions.

Expired Pandemic Relief Programs

Many of the increased credits and programs filers enjoyed in the 2021 tax year have reverted to pre-pandemic levels. These changes will likely reduce tax return amounts for many.

  • Child Tax Credit-reduced to a flat $2000 for each child 17 and under. This is down from $3600 for children under six and $3000 for children 6-17 in 2021.  
  • Earned Income Tax Credit-For single filers without children, the maximum credit has been significantly reduced from $1502 in 2021 to $560 this year.   
  • Child and Dependent Care Credit-This credit maxed out at $8000 in 2021 for filers with more than one child or dependent and is down to $2100 for this filing season.
  • Charitable Donation Deductions-While filers who took the standard deduction last year could claim an additional deduction for charitable donations, this will no longer be allowed for 2022 returns. Only those who itemize will be able to deduct their charitable donations. 

Dates to Remember:

Tax Deadline- April 18, 2023

Extension Deadline-October 16, 2023

Complete Tax and Notary can assist with tax preparation and more. Each tax situation is unique, and there are other changes that may impact you. Please contact us today with any questions or if we can help you with your taxes in any way. We look forward to working with you.