High Inflation Drives Larger Increases In 2022 Tax Code Amounts Than Recent Years, Bloomberg Tax & Accounting Projects

Arlington, Va. — Bloomberg Tax & Accounting issued its 2022 Projected U.S. Tax Rates report today, which provides a detailed and comprehensive projection of inflation-adjusted amounts in the tax code. The report’s projections are based on changes to the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), which were published this morning by the U.S. Bureau of Labor Statistics. Bloomberg Tax & Accounting’s projections provide early notice of the amount of tax savings that will be realized by taxpayers due to increases in deduction limitations, upward adjustments to tax bracket thresholds, and increases to numerous other key thresholds. The full report is available at http://onb-tax.com/7BpZ50G9f8x.

From 2021 to 2022, most inflation-adjusted amounts in the tax code, including the threshold dollar amounts for tax rate brackets, are projected to increase by approximately 3%.

The following provisions have changed from last year’s report based on recent tax legislation:

• Disqualified income limitation, for purposes of the §32 earned income tax credit, increased from $2,200 to $10,000.
• Limitation on the §179D deduction for energy efficient commercial building property is now adjusted for inflation.
• Phaseout range for the §25A Lifetime Learning Credit is no longer adjusted for inflation.

“We predict that inflation-adjusted amounts in the tax code will increase by a greater percentage in 2022 than in prior years due to high U.S. inflation,” said Jean McCormick, vice president, analysis & content, Bloomberg Tax & Accounting. “Taxpayers and advisors can use our projections to begin their 2022 tax planning before the IRS publishes the official 2022 inflation-adjusted amounts later this year.”

 

Individual Income Tax Rate Brackets

Bloomberg Tax & Accounting has projected 2022 income ranges for each tax rate bracket. Income ranges for the tax brackets for married taxpayers filing jointly and for single taxpayers are shown below. Rate brackets for other filing statuses are included in the full report.

Married Filing Jointly and Surviving Spouses

Projected 2022 Tax Rate Bracket Income Ranges

• 10% – $0 to $20,550
• 12% – $20,550 to $83,550
• 22% – $83,550 to $178,150
• 24% – $178,150 to $340,100
• 32% – $340,100 to $431,900
• 35% – $431,900 to $647,850
• 37% – $647,850 or more

 

Unmarried Individuals
(other than Surviving Spouses and Heads of Households)

Projected 2022 Tax Rate Bracket Income Ranges

• 10% – $0 to $10,275
• 12% – $10,275 to $41,775
• 22% – $41,775 to $89,075
• 24% – $89,075 to $170,050
• 32% – $170,050 to $215,950
• 35% – $215,950 to $539,900
• 37% – $539,900 or more

Standard Deduction

Bloomberg Tax & Accounting has projected the following standard deduction amounts for 2022:

Projected 2022 Standard Deduction by Filing Status

• Married Filing Jointly/Surviving Spouses – $25,900
• Heads of Household – $19,400
• All Other Taxpayers – $12,950

Alternative Minimum Tax (AMT)

Projected 2022 AMT exemption amounts are shown below.

Projected 2022 AMT Exemption Amount by Filing Status

• Married Filing Jointly/Surviving Spouses – $118,100
• Unmarried Individuals (other than Surviving Spouses) – $75,900
• Married Filing Separately – $59,050
• Estates and Trusts – $26,500