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2022 tax changes: What you need to know

What we'll cover

  • What’s new this tax season

  • What the updates potentially mean for you

  • How you can prepare for those changes

Tax season, in all of its inevitable glory, has returned once again. As you prepare to dive head-first into a pile of forms before Tax Day — April 18, 2023 — the IRS has a few updates that might affect your refund this year.


From the expected changes like income tax brackets and standard deductions to the less ordinary updates like NFTs and crypto, there’s a lot to consider as you start your filing. It’s completely normal to feel a little overwhelmed by those tax unknowns.


To help lighten the load, we’ve pulled together everything you need to know as you file your 2022 taxes. 

Income tax brackets are higher

This annual shift to account for inflation may not be a surprise, but it's good to double-check what tax bracket your income places you in before you start filling out your forms. The shift for 2022 may mean you’ll be paying a lower percentage on your taxes.

Income tax brackets
Tax rate Income bracket (for single or married, filing individually) Income bracket (for married, filing jointly)
10% $0 to $10,275 $0 to $20,550
12% $10,276 to $41,775 $20,551 to $83,550
22% $41,776 to $89,075 $83,551 to $178,150
24% $89,076 to $170,050 $178,151 to $340,100
32% $170,051 to $215,950 $340,101 to $431,900
35% $215,951 to $539, 900 $431,901 to $647,850
37% $539,901 or more $647,851 or more

For a closer look at what taxes you’ll pay based on your income bracket review our 2022 tax tables .

The standard deduction increased

Just like tax brackets, the standard deduction that most of us receive is adjusted every year to account for inflation. For the 2022 tax year, that means a slight boost for all standard deductions. The exact amount will depend on your filing status (single, married or head of household). Check below to see how much you can expect. 

2022 standard deduction
Filing status Tax year 2022 standard deduction Increase from tax year 2021
Single & married, filing separately $12,950 $400
Married, filing jointly $25,900 $800
Heads of households $19,400 $600

Keep in mind that this is just the starting point for your refund. Your other tax circumstances like dependents, mortgage payments and other factors will impact what your final deduction number is.

The child tax credit returned to normal

To help ease some of the increased financial burdens on families during the pandemic, the IRS temporarily increased the child tax credit for the 2021 tax year. The enhanced child tax credit increased from $2,000 to $3,000 per child for kids 17 and under and $3,600 for those under the age of six. For the 2022 tax year, those benefits no longer apply. With the child tax credit returning to $2,000 per child under the age of 17 at the end of 2022, families should prepare for a potentially lower refund.

It's harder to qualify for child care credits

If you, or you and your partner, usually claim child care credits (a.k.a. refunds for expenses like daycare, preschool or other services that allow you to work and/or search for work), be prepared for a smaller return this year. While in 2021, individuals could submit up to $8,000 in expenses and joint filers could go as high as $16,000, those numbers are dropping to $3,000 and $6,000 for tax year 2022.

You now need to report crypto and NFT transactions

With the rise of digital currencies and other assets, the IRS has greatly expanded its guidelines around what needs to be reported on tax returns. Those now include (in addition to other digital assets): 

  • Non-fungible tokens (NFTs)

  • Any convertible virtual currency and cryptocurrency

Retirement contribution limits increased

If you’re already contributing to a retirement account , in 2022 the amount you could contribute to 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan increased to $20,500.  (Traditional and Roth IRAs stayed put at $6,000.) Unless you made a withdrawal from your account, any increase you made should not affect your taxes. However, if you didn’t increase your contributions, now is a good time to start considering a retirement boost in 2023 when the contribution limit will increase to $22,500 (and IRAs will jump up to $6,500).

Secure Act 2.0 transformed retirement plans

As of the end of 2022, a new federal law — Secure Act 2.0 — introduced quite a few new retirement-related provisions. Some of the most essential elements could increase contributions to your retirement funds. For instance, by 2023, Secure Act 2.0 requires businesses that are introducing new 401(k) and 403(b) plans to automatically enroll eligible employees, starting at a contribution rate of at least 3%, starting in 2025. The full impact for your taxes and finances, in general, may be a few years away.

Wrapping up your tax season

The arrival of tax season might not be anyone’s favorite time of the year. But arming yourself with the latest tax updates and know-how will help you get through that paperwork — and put this year's tax filing behind you.

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