The Form 1040, also known as the “U.S. Individual income Tax Return,” is the primary form used by taxpayers to report their annual income and tax liability to the Internal Revenue Service (IRS). Every year, the IRS releases updated versions of the Form 1040 and its associated schedules and instructions, to reflect any changes in tax laws or other regulations. For the 2022 tax year, there have been a number of changes made to the Form 1040 and related forms, which could impact how taxpayers file their returns.
One of the most notable changes for the 2022 tax year is the increased standard deduction. For the 2021 tax year, the standard deduction was $12,550 for single filers and $25,100 for married couples filing jointly. However, for the 2022 tax year, the standard deduction has been increased to $13,000 for single filers and $26,000 for married couples filing jointly. This increase means that more taxpayers may be able to claim the standard deduction rather than itemizing their deductions, which can simplify the process of filing a tax return.
Another significant change for the 2022 tax year is the increased limit for the saver's credit, also known as the retirement savings contributions credit. This credit is available to low- and moderate-income taxpayers who make contributions to certain types of retirement plans, such as an IRA or 401(k). For the 2021 tax year, the limit for the saver's credit was $65,000 for married couples filing jointly, $48,750 for head of household filers, and $32,500 for single filers. However, for the 2022 tax year, these limits have been increased to $66,000 for married couples filing jointly, $49,500 for head of household filers, and $33,000 for single filers. This means that more taxpayers may be eligible to claim the saver's credit on their returns.
Lastly, for 2022 tax year, the IRS has updated their W-4 form, to better align with the Tax Cuts and Jobs Act changes made in 2017. This form is used by employees to indicate to their employers how much federal income tax to withhold from their paychecks, so updated form will help employees align their withholding more closely to their actual tax liability.
It's important to note that these changes to the Form 1040 and related forms are subject to change, as the IRS may make additional revisions or updates before the start of the 2022 tax year. However, knowing the changes that have been made so far can help taxpayers start planning for the upcoming tax season, and understand how the changes may impact their returns. It is always important to consult with a tax professional or use software to ensure you are aware of the changes and to be sure you are doing everything right.