Once you’ve filed your taxes, set aside your tax documents, and perhaps cashed your refund check, you’re ready for the next tax season. The 2022 tax year brings some significant changes from the previous year.
The marginal tax rates will be slightly higher, and the standard deduction will be higher as well. Knowing the 2022 tax brackets can help you make changes to your income tax withholding and use other tax-saving strategies so you don’t end up with a large tax bill next year.
Seven tax brackets
The American tax system employs graduated, or tiered taxation, so people pay different rates on different amounts of taxable income. There are seven tax brackets with higher rates for higher incomes. When you move to a higher tax bracket, you don’t typically pay that rate on all your income.
For example, an individual taxpayer’s tax liability in 2022 will be 10 percent of their taxable income up to $10,275. But if the person’s total income is, say, $20,000, they’ll be paying a tax of 10 percent up to $10,275 and a tax of 12 percent on the remaining income of $9,725.
2021 tax brackets
– 37% for incomes exceeding $523,600 ($628,300 for joint filing by married couples)
– 35% for incomes exceeding $209,425 ($418,850 for joint filing by married couples)
– 32% for incomes exceeding $164,925 ($329,850 for joint filing by married couples)
– 24% for incomes exceeding $86,375 ($172,750 for joint filing by married couples)
– 22% for incomes exceeding $40,525 ($81,050 for joint filing by married couples)
– 12% for incomes exceeding $9,950 ($19,900 for joint filing by married couples)
– 10% for incomes not exceeding $9,950 ($19,900 for joint filing by married couples)
2022 tax brackets
– 37% for incomes exceeding $539,900 ($647,850 for joint filing by married couples)
– 35% for incomes exceeding $215,950 ($431,900 for joint filing by married couples)
– 32% for incomes exceeding $170,050 ($340,100 for joint filing by married couples)
– 24% for incomes exceeding $89,075 ($178,150 for joint filing by married couples)
– 22% for incomes exceeding $41,775 ($83,550 for joint filing by married couples)
– 12% for incomes exceeding $10,275 ($20,550 for joint filing by married couples)
– 10% for incomes equal to $10,275 or less ($20,550 for joint filing by married couples)
It is essential to understand that your highest tax bracket does not necessarily reflect the actual amount of federal income taxes you will pay. Also, to get a greater tax benefit, you need to have more itemized deductions than the standard deduction.