Federal and Ohio Tax Changes
For 2022, there are a number of federal and Ohio tax changes that individuals should be aware of as well as increases due to inflation.
Some of those federal and Ohio changes are as follows:
- Social Security monthly payments will rise by approximately 6% in 2022.
- In 2022, the federal income tax brackets will be rising. The actual tax rates as of right now will remain the same, with 37% being the top rate. However, there continues to be discussions in Congress on making changes to these rates. We will see what happens.
- In 2022 the federal standard deduction will be $12,950 for an individual and $25,900 for a married couple.
- In 2022, the gift tax annual exclusion will increase from $15,000 gifts per person per year to $16,000.
- The federal estate tax exemption will increase from $11,700,000 to $12,060,000 per person. There were a few bills in Congress in 2021 that were going to reduce the estate tax exemption to as low as $3,500,000 per person. However, the federal estate tax exemption has stayed the same. The federal estate tax exemption is scheduled to be reduced beginning in the year 2026 to the $5,000,000 to $6,000,000 range. We will see if it is reduced sooner, or if it will continue to be increased due to inflation until 2026. The tax rate remains at 40%.
- For Ohio income taxes, the most notable changes are that instead of having six income tax brackets, beginning on January 1, 2021, Ohio will only have four income tax brackets. Those brackets will be as follows:
$0 – $25,000 0%
$25,001 – $44,250 2.765%
$44,251 – $88,450 3.226%
$88,451 – $110,650 3.688%
$110,651 and above 3.99%
As you can see, the top Ohio income tax rate for 2021 is 3.99%, and individuals with income of $25,000 or less will not pay any Ohio income taxes.
Please be aware of these items and consult your tax advisor if you have any questions.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.
James F. Contini II, Esq.
Certified Specialist in Estate Planning,
Trust & Probate Law by the OSBA
Krugliak, Wilkins, Griffiths & Dougherty Co., LPA
405 Chauncey Avenue NW
New Philadelphia, Ohio 44663
Phone: (330) 364-3472
Fax: (330) 602-3187