2022 Tax Changes

Feb 21, 2023

2022 Tax Changes

The year 2022 has brought about some changes in the tax rules for individuals, and particularly for expats. Here are some of the key changes that expats should be aware of.

Firstly, the US federal income tax rates have been adjusted for inflation. For expats who are US citizens or permanent residents, the standard deduction has increased from $12,550 to $12,950 for single filers and from $25,100 to $25,900 for married couples filing jointly. This means that more income is now exempt from taxation.

Secondly, the Foreign Earned Income Exclusion (FEIE) limit has also increased. The maximum amount of income that can be excluded from taxation for expats who qualify for the FEIE has increased from $108,700 to $112,100 for the 2022 tax year. This means that more expats will be able to exclude a larger portion of their income from US taxation.

Thirdly, while there are no more Covid refunds for 2022, the refundable portion of Additional Child Tax Credit has increased from $1,400 to $1,500. The income thresholds to phase in and out of this credit have remained the same.

Finally, it is important to note many of the thresholds that have not changed despite growing inflation. The filing thresholds for reporting foreign financial accounts on FBAR and Form 8938 have not been adjusted for inflation and remain the same as in previous years.

In summary, the 2022 tax year has brought about some changes that are particularly relevant to expats. These changes include adjustments to federal income tax rates and the FEIE limit, an increased Additional Child Tax Credit, and certain thresholds not being adjusted with inflation. Expats should stay informed and consult a tax professional to ensure that they are meeting all of their tax obligations.

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