IRS announces 2022 tax rates, standard deduction amounts, 401(k) limit increases to $20,500 and more

Revenue Procedure 2021-45 announces annual inflation adjustments for tax year 2022, meaning new tax-rate schedules and tax tables and cost-of-living adjustments for various tax breaks. Taxpayers should consult additional guidance to determine whether these adjustments remain applicable for 2022.

Also, the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is now increased to $20,500, up from $19,500 for 2021 and 2020.

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver's Credit all increased for 2022. Taxpayers can also deduct contributions to a traditional IRA if they meet certain conditions.

The IRS also issued technical guidance regarding all cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2022 in Notice 2021-61 posted on IRS.gov.