Down Arrow Button Icon

With inflation running rampant, the IRS is making some changes for the upcoming tax year.

The Internal Revenue Service on Wednesday released an update for individual income tax brackets to adjust for inflation. While the tax rates themselves haven’t changed, the income amounts defining them have.

The impact on your wallet, of course, depends on how you file.

Beyond brackets, the standard deduction is adjusting next year to account for rising prices, increasing $800 to $25,900 for married couples filing jointly and up $400 to $12,950 for single taxpayers and married individuals filing separately. Heads of households will see a $400 increase in the standard deduction to $19,400.

Also, if you qualify for a health savings account, you can add a little more. The individual limit for annual contributions has been raised to $4,950, a $150 increase, and the family plan max has jumped $250 to $7,400. (Remember, balances in this type of account can be rolled over from one year to the next and can accrue interest tax-free.)

For married couples filing jointly, the proposed 2022 rates work out as follows:

Income	Tax
Up to $20,555	10% of taxable income
$20,551–$83,550	$2,055 plus 12% of the excess over $20,550
$83,551–$178,150	$9,615 plus 22% of the excess over $83,550
$178,151–$340,100	$30,427 plus 24% of the excess over $178,150
$340,101–$431,900	$69,295 plus 32% of the excess over $340,100
$431,901–$647,850	$98,671 plus 35% of the excess over $431,900
$647,851 plus	$174,253.50 plus 37% of the excess over $647,850

If you’re single, here’s how things shake out for the new tax plan:

Income	Tax
Up to $10,275	10% of taxable income
$10,276–$41,775	$1,027.50 plus 12% of the excess over $10,275
$41,776–$89,075	$4,807.50 plus 22% of the excess over $41,775
$89,076–$170,050	$15,213.50 plus 24% of the excess over $89,075
$170,051–$215,950	$34,647.50 plus 32% of the excess over $170,050
$215,951–$539,900	$49,335.50 plus 35% of the excess over $215,950
$539,901 plus	$162,718 plus 37% of the excess over $539,900

Heads of household will face these brackets:

Income	Tax
Up to $14,650	10% of taxable income
$14,651–$55,900	$1,465 plus 12% of the excess over $14,650
$55,901–$89,050	$6,415 plus 22% of the excess over $55,900
$89,051–$170,050	$13,708 plus 24% of the excess over $89,050
$170,051–$215,950	$33,148 plus 32% of the excess over $170,050
$215,951–$539,900	$47,836 plus 35% of the excess over $215,950
$539,901 plus	$161,218.50 plus 37% of the excess over $539,900

And married individuals filing separate returns can expect to face these rates:

Income	Tax
Up to $10,275	10% of taxable income
$10,276–$41,775	$1,027.50 plus 12% of the excess over $10,275
$41,776–$89,075	$4,807.50 plus 22% of the excess over $41,775
$89,076–$170,050	$15,213.50 plus 24% of the excess over $89,075
$170,051–$215,950	$34,647.50 plus 32% of the excess over $170,050
$215,951–$323,925	$49,335.50 plus 35% of the excess over $215,950
$323,926 plus	$87,126.75 plus 37% of the excess over $323,925

The alternative minimum tax exemption amount for the 2022 tax year is $75,900, up from $73,600 this year. Married couples filing jointly will see an increase from $114,600 to $118,100.

And the lifetime gift and estate tax exemption has climbed to $12.06 million per individual, a $360,000 increase from 2021. That shields your loved ones from federal estate and gift taxes when you die.

Taxes are due on Friday, April 15, next year.