New Tax Law Changes You Need to Know [Updated for 2022-2023]

Getting psyched to do your taxes? I suppose if you’re expecting a refund you might be.

Or if you’re kind of a tax nerd like me, you might take some pleasure in breaking down the tables and watching the software do its thing. In either case, here are the tax law changes that apply to the 2022 tax year. Please note, these are the changes that affect the taxes you will be filing in 2023. (Income you earned in 2022.)

New Tax Rules for 2022 (Filed in 2023)

Let’s start with the U.S. federal income tax brackets. There were slight changes for inflation, but no major changes from last year:

In addition, here are the other important changes that will most likely affect your taxes:

• The standard deduction increased slightly for 2022. It is now $12,200 for single filers, $24,400 for married filers, and $18,350 for heads of household. Here’s more info on the standard deduction.
• The child tax credit remained $2,000, and the amount of the credit that is refundable is still $1,400, with the phaseout threshold for married couples at $400,000 and $200,000 for single filers.
• The maximum earned income tax credit rose to $6,557, and the maximum income limit for the credit rose to $55,952.
• The foreign earned income exclusion rose slightly to the amount of $105,900.
• The standard mileage rate you can expense if you use your car for business has gone up to 58 cents per mile, so keep track of your mileage.

Related: How Long Will it Take to Get Your Tax Refund

More Details About 2022 Tax Changes

Retirement Contributions for 2022-2023

Retirement contributions also increased slightly for 2022. 401(k) and 403(b) contributions are up to $19,000 for 2019, with a $6,000 catch up contribution allowed for those 50 and over. SEP IRA and Solo 401(k) contribution limits increased to $56,000 for 2019.

Both Roth and Traditional IRA’s contribution limits increased to $6,000 with a $1,000 catch up contribution the 50+ crowd. The income phaseouts increased slightly as well.

For Traditional IRAs single people (and heads of households) who have access to an employer plan can earn up to $64,000 before the deductibility of your contributions is affected.

If you are married and only one spouse has earned income and that spouse has access to an employer plan, the phase-out begins at $103,000. For married couples where both spouses work, but only one has access to an employer plan, the income phase-out limits begin at $193,000.

Roth IRA phase-outs are much simpler. For married couples, the phase-out begins at $193,000. For single people and heads of household, the phase-out limits begin at $122,000 for the 2019 tax year.

Retirement Contributions for 2022-2023

If you want to plan ahead and contribute evenly over the year to your retirement accounts in 2023 you’ll need to know about the upcoming increases.

401(k) and 403(b) contributions are going up to $19,500, with catch up contributions of $6,500 for those 50 and over.

IRA contribution limits for both Traditional and Roth remain the same for 2020 at $6,000 with $1,000 catch up contribution if you are 50 or older.

Hey kids, this year the absolute last day to file taxes (that is, your federal personal income taxes) is April 18, 2023.