Bloomberg Tax & Accounting issued its 2022 Projected U.S. Tax Rates report today, which provides a detailed and comprehensive projection of inflation-adjusted amounts in the tax code.
The report’s projections are based on changes to the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), which were published this morning by the U.S. Bureau of Labor Statistics.
Bloomberg Tax & Accounting’s projections provide early notice of the amount of tax savings that will be realized by taxpayers due to increases in deduction limitations, upward adjustments to tax bracket thresholds, and increases to numerous other key thresholds. The full report is available at http://onb-tax.com/7BpZ50G9f8x.
From 2021 to 2022, most inflation-adjusted amounts in the tax code, including the threshold dollar amounts for tax rate brackets, are projected to increase by approximately 3%.
The following provisions have changed from last year’s report based on recent tax legislation:
- Disqualified income limitation, for purposes of the §32 earned income tax credit, increased from $2,200 to $10,000.
- Limitation on the §179D deduction for energy efficient commercial building property is now adjusted for inflation.
- Phaseout range for the §25A Lifetime Learning Credit is no longer adjusted for inflation.
“We predict that inflation-adjusted amounts in the tax code will increase by a greater percentage in 2022 than in prior years due to high U.S. inflation,” said Jean McCormick, vice president, analysis & content, Bloomberg Tax & Accounting. “Taxpayers and advisors can use our projections to begin their 2022 tax planning before the IRS publishes the official 2022 inflation-adjusted amounts later this year.”