Below is a summary of some of the US personal tax changes for the 2022 filing year that may affect you:
- Many credits and other COVID relief measures introduced for 2020 and 2021 have not been extended to 2022. For example, the Economic Impact Payment/Recovery Rebate Credit and the charitable contribution deduction available while claiming the standard deductions were not extended to 2022.
- If you bought a new, qualified plug-in electric vehicle in 2022, you may be eligible for a clean vehicle tax credit up to $7,500.
- The standard deduction amount has increased to $12,950 for single and $25,900 for married filing jointly.
- The child tax credit dropped to a maximum of $2,000 per dependant under age 17 for 2022. In 2021, the child tax credit was $3,600 for children under age six or $3,000 for children under age 18. In addition, for 2022 the tax credit is only refundable up to $1,500 per child (subject to phase out limitations).
- The foreign earned income exclusion was increased to $112,000 for 2022.
- Employees are not able to claim a deduction for a home office. However, self-employed individuals continue to qualify for the home office deduction. In order for a self-employed individual to qualify for the deduction, they need to use a portion of their home exclusively for conducting business on a regular basis and the home must be the taxpayer’s principal place of business.
- The annual exclusion limit per donee for gifts made by a Taxpayer to another person has increased to $16,000 in 2022 ($164,000 for gifts to non-US citizen spouse).
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