On Wednesday, November 10, 2021, the IRS announced the tax year 2022 annual inflation adjustments for more than 60 tax provisions. Revenue Procedure 2021-45 provides details about these annual adjustments.

The changes apply to the 2022 tax year, for taxes filed in 2023. Some key takeaways from Revenue Procedure 2021-45 include:

• Basic tax rates have not changed for 2022 although income brackets for each rate have.
• The standard deduction for married couples filing jointly for tax year 2022 rises to $25,900. For single taxpayers, the standard deduction rises to $12,950.
• The annual gift exclusion for calendar year 2022 will be $16,000 vs, $15,000 in 2021.
• The monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $280.
• For taxable years beginning in 2022, there will be a $2,850 limit on voluntary employee salary reductions for contributions to health flexible spending arrangements. If the plan permits carryover of unused amounts, the maximum carryover is $570.
• The maximum credit allowed for adoptions for tax year 2022 is the amount of qualified adoption expenses up to $14,890 up from $14,440 in 2021.

More information on these annual inflation adjustments for tax year 2022 can be found here.