![]() ![]() It allows people to save money on an after-tax basis, then let it grow tax-free until they retired, when they could make withdrawals without owing taxes. The Roth IRA was designed more than two decades ago as a way for middle-class workers to set aside money for retirement. Likewise, the income phaseout range for married couples and head of household filers will also get a boost. In the current tax year, the phase-out range for Roth IRAs was $125,000 to $140,000. The tax agency also said that the catch-up contribution for people over 50 years old is also remaining at $1,000, since it's not subject to an annual cost-of-living increase.īut more higher-income earners may be able to contribute to a Roth IRA in 2022, since the IRS said the income phase-out range for taxpayers making contributions to a Roth IRA will be higher, ranging from $129,00 to $144,000 for single taxpayers in 2022. However, the amount that people can contribute to IRAs is remaining the same next year, at $6,000. Next year, the contribution limit for 401(k)s, 403(b)s and most 457 plans will increase to $20,500 from $19,500 in 2021. The changes come after the IRS earlier this month said workers can stash an extra $1,000 in their 401(k)s. The maximum Earned Income Tax Credit will also get a boost next year, rising to $6,935 for qualifying taxpayers with at least three children, an increase of more than $200 from the current tax year. But because the IRS announced the expanded amount on November 10, some companies may have already closed their open-enrollment periods for 2022 employee benefits, which means some workers may not have been able to tap into the higher limit. The IRS said some other limits are also going higher for the next tax year.Įmployees will be able to sock away up to $2,850 in their flexible spending accounts for health expenses, or an increase of $100 from the 2021 maximum. Other changes: Higher FSA limit, 401(k) totals ![]() The standard deduction will increase to $12,950, or a boost of $400, for single taxpayers, the agency said. ![]() Next year, it will increase to $25,900, or $800 higher than in the current tax year, for married couples. The agency said it's also boosting the standard deduction to account for inflation. The IRS said the personal exemption will remain at $0, the same as in 2021 the personal exemption was eliminated in the Tax Cuts and Jobs Act. 37% tax bracket: single filers earning more than $539,900 and married couples filing jointly earning over $647,850.35% tax bracket: single filers earning more than $215,950 and married couples filing jointly earning over $431,900.32% tax bracket: single filers earning more than $170,050 and married couples filing jointly earning over $340,100.24% tax bracket: single filers earning more than $89,075 and married couples filing jointly earning over $178,150.22% tax bracket: single filers earning more than $41,775 and married couples filing jointly earning over $83,550.12% tax bracket: single filers earning more than $10,275 and married couples filing jointly earning over $20,550.10% tax bracket: single individuals earning up to $10,275 and married couples filing jointly earning up to $20,550.Here are the new thresholds for the nation's seven tax brackets in 2022. In the prior year, the increases were closer to 1%. Overall, the new tax bracket income thresholds represent increases of about 3%. ![]()
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