Page 10 - Supplement to 2022 Income Tax
P. 10
Estimating Your 2022 Taxes
Defined contribution plans and pension plans (pages For a head of household, the 50% credit applies if
724–731). The overall limitation on employee and 2022 AGI does not exceed $30,750, the 20% credit
employer contributions (including forfeitures) to a rate applies if AGI does not exceed $33,000, and the
defined contribution plan (such as a self-employed 10% credit applies if AGI does not exceed $51,000.
profit-sharing SEP or Keogh) is $61,000 (up from For single individuals, married persons filing
$58,000 in 2021). The general limitation on the separately, and qualifying widows/widowers, the 50%
annual benefit from a defined benefit pension plan in credit applies if 2022 AGI does not exceed $20,500,
2022 is $245,000 (up from $230,000 in 2021). the 20% credit rate applies if AGI does not exceed
$22,000, and the 10% credit applies if AGI does not
Compensation limit (pages 195, 726–727). The exceed $34,000.
maximum amount of compensation that can be taken
into account when applying the contribution limits Non-Retirement Cost-of-Living
for qualified defined contribution and pension plans Adjustments for 2022
is $305,000 (up from $290,000 in 2021).
Standard deduction amounts (pages 349–352). The
SEP eligibility (page 251). Employees meeting the basic standard deduction amounts for 2022 have
age and service requirements must be covered by a increased to $25,900 for married couples filing jointly
SEP if they have 2022 compensation exceeding $650 and surviving spouses, $19,400 for heads of households,
(unchanged from 2021). and $12,950 for singles and married persons filing
separately. The additional standard deduction for
Definition of key employee or highly compensated taxpayers age 65 or older or blind (Your Income Tax 2022,
employee (page 83, 195). The 2022 earnings pages 353–354) at the end of 2022 is $1,750 for single
threshold for determining highly compensated taxpayers and heads of households (up from $1,700 in
employees under the nondiscrimination rules is 2021) and $1,400 for married persons (whether filing
$135,000 (up from $130,000 in 2021). The 2022 jointly or separately) and qualifying widows/widowers
threshold for treating officers as key employees (up from $1,350 in 2021).
under the top-heavy plan rules is $200,000 (up from For a person who meets the definition of a dependent
$185,000 in 2021). for 2022, the basic standard deduction (Your Income
Tax 2022, pages 353, 355) is the greater of (1) $1,150
Qualified longevity annuity contracts (page 241). IRA or (2) the dependent’s earned income plus $400 (but
transfers to a qualified longevity annuity contract no more in total than the basic standard deduction for
(QLAC), which are exempt from required minimum the dependent’s filing status).
distributions, are limited to $145,000 (up from Rate brackets for net capital gain and qualified
$135,000 in 2021). dividends (pages 115-119). The bracket breakpoints
between the 0% and 15% capital gain rates, and
Saver’s credit (page 529). The first $2,000 of eligible between the 15% and 20% capital gain rates, are
contributions (including ABLE account contributions) increased for 2022. The breakpoint between the 0%
made for 2022 may qualify for a 50%, 20%, or rate and the 15% rate is: $83,350 if married filing
10% retirement savings contribution credit (“saver’s jointly or a qualifying widow/widower, $55,800 if a
credit”), depending on the taxpayer’s AGI. head of household, or $41,675 if single or married
For married persons filing jointly, the 50% credit filing separately. There is no tax (0% rate applies) on
applies if 2022 AGI does not exceed $41,000, the 2022 qualified dividends and eligible long-term capital
20% credit rate applies if AGI does not exceed gains (collectibles gains and unrecaptured Section
$44,000, and the 10% credit applies if AGI does not 1250 gains are not eligible) if taxable income does
exceed $68,000. not exceed the applicable breakpoint. Even if taxable
8 | Supplement to J.K. Lasser’s Your Income Tax 2022
