January 6, 2022 – Despite the media’s focus on proposed tax changes for 2022, none have taken place to date. However,
Your paycheck will change:
Tax brackets have widened, leading to higher tax withholding.
Earnings, subject to social security tax, are now $147,000, an increase of $4,200.
Maximum contributions to qualified plans (e.g., 401k) have increased to $20,500. Catch-up contributions did not change, and minor increases are set for Health Savings Account contributions.
Social security retirement benefits increased 5.9%, however, increased Medicare premiums will reduce the impact.
You can give more away:
The estate and gift tax exemption has increased to $12.06 million per person, allowing a married couple to shelter $24.12 million from tax. The annual gift exclusion amount has increased to $16,000 per person, after four years of holding at $15,000. This increase will allow a married couple to provide a joint gift to a married child of $64,000 without gift tax implications.
