Page 12 - Supplement to 2022 Income Tax

Estimating Your 2022 Taxes

Premiums for long-term-care policies (page 429). The with no children, the phaseout begins at $9,160,
maximum amount of long-term-care insurance or $15,290 if married filing jointly. For taxpayers
premiums that can be included in the itemized with one child, the credit is completely phased out
deduction for medical expenses depends on the if either earned income or AGI is $43,492 or more,
policyholder’s age at the end of the year. The 2022 $49,622 if married filing jointly. For two children,
limit is $450 for taxpayers age 40 or younger, $850 the credit is completely phased out if either earned
for those over age 40 but not over 50, $1,690 for those income or AGI is at least $49,399 or $55,529 if
over age 50 but not over 60, $4,510 for those over age married filing jointly. For taxpayers with three or
60 but not over 70, and $5,640 for those over age 70. more children, the credit is completely phased out
if either earned income or AGI is at least $53,057
Per diem payments from long-term-care policies or $59,187 if married filing jointly. For taxpayers
(page 429). Payments received from a qualified with no children, the phaseout is complete at income
long-term-care insurance contract on a per diem or of $16,480 or $22,610 if married filing jointly. The
other periodic basis are tax free for 2022 up to $390 limit on investment income for 2022 is $10,300
per day without regard to actual expenses incurred (up from $10,000 in 2021)
(down from $400 in 2021).
Student loan interest deduction (pages 631–633). The
Foreign earned income and housing exclusions (pages maximum above-the-line deduction for student loan
659–667). The maximum foreign earned income interest is set by statute at $2,500. For 2022, the
exclusion for 2022 is $112,000 (up from $108,700 $2,500 limit is phased out if modified adjusted gross
in 2021). income (MAGI) is between $145,000 and $175,000
Based on a maximum earned income exclusion for married couples filing jointly, or between $70,000
of $112,000, the base foreign housing amount and $85,000 if single, head of household, or qualifying
is $17,920 (16% × $112,000) for the full year, or widow/widower. Married persons filing separately and
$49.10 per day if the foreign residence or physical individuals who meet the definition of a dependent
presence test is met for only part of the year. The are not eligible for the deduction.
foreign housing exclusion is allowed to the extent
that housing expenses, not to exceed the annual American opportunity credit and lifetime learning
limit, exceed the base amount. Based on a maximum credit (pages 625–628). The credit amount and
earned income exclusion of $112,000, the 2022 phaseout range for the American opportunity credit
limit on housing expenses will generally be $33,600 are not subject to cost-of-living changes. By statute,
(30% × $112,000) for the full year, or $92.05 per the credit of up to $2,500 per eligible student phases
qualifying day, but the IRS will announce a higher out over a MAGI range of $80,000 to $90,000 for
housing expense limit for designated high-cost areas. single filers, heads of households, and qualifying
widows/widowers, and $160,000 to $180,000 for
Earned income credit (pages 523–526). For 2022, the joint filers. The same MAGI limits apply to the
maximum credit is $3,733 for one child, $6,164 for lifetime learning credit. Married persons filing
two children, $6,935 for three or more children, and separately may not claim either credit.
$560 if there are no children.
For taxpayers with children, the 2022 credit will Transportation fringe benefits (pages 69–71). The 2022
begin to phase out if either earned income or AGI monthly tax-free limit for employer-provided transit
is at least $20,130 if single, head of household, or passes and commuter van/bus transportation (paid by
qualifying widow/widower, or at least $26,260 employer or by employee salary-reduction contributions),
if married filing jointly. Married persons filing as well as the monthly exclusion for parking benefits, is
separately may not claim the credit. For those $280 per month (up from $270 in 2021).

10 | Supplement to J.K. Lasser’s Your Income Tax 2022