At the close of every year, NATP pulls together a list of common facts and figures that tax professionals can reference throughout the coming tax season while preparing returns and advising clients.
Here’s a brief excerpt from the article:
Personal exemption
For 2018-2025, the personal exemption deduction for taxpayer, spouse and dependents is zero. However, the personal exemption amount for other purposes (for example, the qualifying relative gross income test) is $4,300 for 2021 ($4,400 for 2022).
Standard deduction
The standard deduction amounts increased in 2021.
| Filing status | 2021 | 2022 |
|---|---|---|
| MFJ/Surviving Spouse (SS) | $21,500 | $25,090 |
| HH | $18,800 | $19,400 |
| Single | $12,550 | $12,950 |
| MFS | $12,550 | $12,950 |
| Additional for age or blindness | 2021 | 2022 |
|---|---|---|
| MFJ/SS | $1,350 | $1,400 |
| Single or HH | $1,700 | $1,750 |
The standard deduction for dependents who only have unearned income is $1,100. If the dependent has both earned and unearned income, the standard deduction is the greater of:
- $1,100 ($1,150 for 2022), or
- The dependent’s earned income plus $350 ($400 for 2022), but not more than the basic standard deduction for their filing status
Itemized deductions
For 2018–2025, the overall limitation (Pease limitation) on itemized deductions for taxpayers with AGI exceeding an applicable threshold does not apply.
Medical expense deduction: The limitation is permanently set for deducting medical expenses to 7.5% of AGI, regardless of age.
Capital gains rates
The top tax rate for capital gains and qualified dividends is permanently set at 20% for taxpayers with taxable income in the highest tax bracket. The net investment income tax (NIIT) of 3.8% makes the overall capital gain rate for higher income taxpayers effectively 23.8%.
For tax years beginning after 2017, the 0% rate applies to capital gain below the maximum 0% rate amount. The 15% rate applies to capital gain at or above the 0% rate amount and below the maximum 15% rate amount. The 20% rate applies to capital gain at or above the 15% rate amount. These amounts will be indexed for inflation.
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About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.