tax brackets

Income Tax Brackets for 2022 Are Set

Although the tax rates didn't change, the tax bracket income ranges for the 2022 tax year are adjusted to account for inflation.

Tax planning is all about thinking ahead. And since the federal income tax brackets for the 2022 tax year are already available, you can start thinking about how to handle your 2022 finances in a tax-efficient way — even though you haven't even started your 2021 tax return yet.

The tax rates haven't changed since 2018. For 2022, they're still set at 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, the tax brackets are adjusted (or "indexed") each year to account for inflation. The inflation-adjusted tax brackets for 2022 are below (for the 2021 tax brackets, see What Are the Income Tax Brackets for 2021 vs. 2020?).

When using the tax brackets, it's important to remember that the tax rates only apply to the income that falls within the applicable tax bracket range for your filing status. For instance, a married couple filing a joint return with $100,000 of taxable income in 2022 won't pay $22,000 in tax just because their total taxable income falls within the 22% bracket for joint filers. The 22% rate is not applied as a flat rate on the entire $100,000. Instead, using marginal tax rates, the first $20,550 of income is taxed at the 10% rate for a tax of $2,055 on that portion of the income. The next $63,000 of income (the amount from $20,550 to $83,550) is taxed at the 12% rate for an additional tax of $7,560. Then, only the last $16,450 (the amount over $83,550) is taxed at the 22% rate for $3,619 of tax. That comes to a total tax bill of only $13,234. (That's $8,766 less than if a flat 22% rate was applied to the entire $100,000.)

2022 Tax Brackets for Single Filers and Married Couples Filing Jointly

Tax Rate

Taxable Income
(Single)

Taxable Income
(Married Filing Jointly)

10%

Up to $10,275

Up to $20,550

12%

$10,276 to $41,775

$20,551 to $83,550

22%

$41,776 to $89,075

$83,551 to $178,150

24%

$89,076 to $170,050

$178,151 to $340,100

32%

$170,051 to $215,950

$340,101 to $431,900

35%

$215,951 to $539,900

$431,901 to $647,850

37%

Over $539,900

Over $647,850

--

2022 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers

Tax Rate

Taxable Income
(Married Filing Separately)

Taxable Income
(Head of Household)

10%

Up to $10,275

Up to $14,650

12%

$10,276 to $41,775

$14,651 to $55,900

22%

$41,776 to $89,075

$55,901 to $89,050

24%

$89,076 to $170,050

$89,051 to $170,050

32%

$170,051 to $215,950

$170,051 to $215,950

35%

$215,951 to $323,925

$215,951 to $539,900

37%

Over $332,925

Over $539,900

--

Will Income Tax Rates Go Up in the Future?

President Biden and Congressional Democrats are still trying to enact a social spending bill that would raise taxes on wealthier Americans. However, the current version of the proposed legislation – known as the Build Back Better Act – wouldn't change the income tax rates. Instead, it would impose a 5% to 8% surtax on people with a modified adjusted gross income above $10 million, expand the 3.8% surtax on net investment income, and discontinue or limit tax breaks for high-income taxpayers.

The bill is still a work in progress, though. Although it passed in the House of Representatives, it's stuck in the Senate. Since the Senate is split 50/50 between Republicans and Democrats (with Vice President Harris breaking any ties) and no Republicans are expected to vote for the bill, all 50 Democratic Senators must vote for the legislation for it to pass in the upper chamber. But, so far, the Democrats don't have the votes because Sen. Joe Manchin (D-W.Va.) said he doesn't support the bill in its current form. As a result, expect the bill to be revised at some point or a new bill to emerge. In either case, income tax rate changes could be included. Stay tuned!

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