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Tax Facts - 2 Year Comparison

Here's a quick review of some of the tax changes you'll see from 2021 to 2022 as a result of inflation adjustments and new tax laws.

Provision 2021 2022 +/-
Business equipment Sec. 179 expensing deduction $1,050,000 $1,080,000 +$30,000
Total purchase limit for full Sec. 179 expensing deduction $2,620,000 $2,700,000 +$80,000
Standard mileage rate: business 56¢ per mile 58.5¢ per mile +2.5¢
Standard mileage rate: medical/moving 16¢ per mile 18¢ per mile +2.0¢
Mileage rate: charitable activity 14¢ per mile 14¢ per mile nc
Maximum wages subject to social security tax $142,800 $147,000 +$4,200
Social security earnings limit      
- Under full retirement age $18,960 $19,560 +$600
- Full retirement age No limit No limit nc
Top estate tax rate 40% 40% nc
Estate tax exemption $11,700,000 $12,600,000 +$900,000
Annual gift tax exclusion (per donee) $15,000 $16,000 +$1,000
Alternative minimum tax exemption      
- Single $73,600 $75,900 +$2,300
- Married, joint $114,600 $118,100 +$3,500
- Married, separate $57,300 $59,050 +$1,750
Maximum retirement plan contributions      
- IRA for those under age 50 $6,000 $6,000 nc
- IRA for those 50 and over $7,000 $7,000 nc
- SIMPLE plan for those under age 50 $13,500 $14,000 +$500
- SIMPLE plan for those 50 and over $16,500 $17,000 +$500
- 401(k) plan for those under age 50 $19,500 $20,500 +$1.000
- 401(k) plan for those 50 and over $26,000 $27,000 +$1.000
HSA contribution limits      
- Self only $3,600 $3,650 +$50
- Family $7,200 $7,300 +$100
- Additional for 55 & older $1,000 $1,000 nc
"Kiddie tax" threshold $2,200 $2,300 +$100
"Nanny tax" threshold $2,200 $2,400 +$200
Education savings account contribution (Coverdell) $2,000 $2,000 nc
American opportunity (Hope) credit limit $2,500 $2,500 nc
Education loan interest deduction $2,500 $2,500 nc
Personal exemption (suspended through 2025) Suspended Suspended na
FICA & self-employment tax      
Taxable wages for Social Security/Medicare Up to $142,800 Up to $147,000 +$4,200
Social Security/Medicare tax rate      
- Employees 7.65% 7.65% nc
- Employers 7.65% 7.65% nc
- Self-employed 15.3% 15.3% nc
Standard deduction      
- Single $12,550 $12,950 +$400
- Joint returns & surviving spouses $25,100 $25,900 +$800
- Married filing separately $12,550 $12,950 +$400
- Head of household $18,800 $19,400 +$600
- Additional for elderly or blind (married) $1,350 $1,400 +$50
- Additional for elderly or blind (single) $1,700 $1,750 +$50

While Congress is debating what to do with your tax rates, now is the time to create a strategy so that if or when tax rates do increase, you will be prepared. Book An Appointment

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