Tax-return season for 2021 income has officially begun. However, don’t forget to look ahead and consider your tax planning for 2022. Key numbers in tax-law provisions are adjusted for inflation at the start of each year. Some of these adjustments are important for employees, their paychecks, and their planning.
As many tax-code sections are annually modified for inflation, it can be hard to spot the adjustments that matter to you. Some apply only to super-wealthy executives and other individuals, such as the federal exemption for estate tax (in 2022, $12.06 million for single taxpayers and $24.12 million for married joint filers). The more obscure adjustments are chiefly of interest only to administrators of corporate benefit plans and other experts (like me) who keep track of this stuff. For example, the income definition of “highly compensated employee,” which affects eligibility for employee stock purchase plans (ESPPs) and 401(k) plan non-discrimination testing, is $135,000 in 2022.
So let’s cut through the clutter and focus on the essential points. Below are the top three sets of tax figures in 2022 that all employees should know. They relate to compensation from work: paycheck withholding, the potential need for estimated taxes, and your retirement savings.