2022 Tax Brackets, Standard Deduction, and 0% Capital Gains

My previous post listed the 2022 retirement account contribution and income limits. The IRS will publish a separate notice shortly with the inflation-adjusted tax brackets and other income limits for 2022. I calculated some of the most commonly used numbers using the published inflation numbers and the same formula prescribed in the tax law. In general, the 2022 numbers will increase by 3.1% from 2021 before rounding.

These numbers don’t take into account the draft legislation currently being considered by Congress. Some of the numbers may change if laws change.

2022 Standard Deduction

About 90% of all taxpayers take the standard deduction. The standard deduction in 2022 is:

20212022Single or Married Filing Separately$12,550$12,950Head of Household$18,800$19,400Married Filing Jointly$25,100$25,900Standard Deduction

Source: IRS Rev. Proc. 2020-45, author’s own calculation.

People who are age 65+ or blind have a higher standard deduction than these.

2022 Tax Brackets

The tax brackets are based on taxable income, which is AGI minus various deductions.

SingleMarried Filing Jointly10%$0 – $10,275$0 – $20,55012%$10,275- $41,775$20,550 – $83,55022%$41,775 – $89,075$83,550 – $178,15024%$89,075 – $170,050$178,150 – $340,10032%$170,050 – $215,950$340,100 – $431,90035%$215,950 – $539,900$431,900 – $647,85037%> $539,900> $647,850Tax Brackets

Source: author’s own calculation.

2022 0% Capital Gains Tax

When your other taxable income plus your qualified dividends and long-term capital gains are below a cutoff, you will pay no federal income tax on your qualified dividends and long-term capital gains under this cutoff.

The cutoff is close to the top of the 12% tax bracket but they don’t line up exactly.

20212022Single$40,400$41,675Head of Household$54,100$55,800Married Filing Jointly$80,800$83,350Maximum Zero Rate Amount

Source: IRS Rev. Proc. 2020-45, author’s own calculation.

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