Amid record levels of inflation, The IRS has released higher federal tax brackets and has adjusted amounts for contributions to accounts such as IRA, HSA, and 401ks, for 2023 to adjust for inflation.
In the below charts, we’ve gathered the most important numbers for you and your family as we look to enter 2023. For any of the accounts listed below where you have set up auto-contributions (i.e. your 401k plan through your employer, monthly deposit into your ROTH IRA, etc) we recommend reviewing these contributions to increase them if it aligns with your financial plan.
If we failed to include a number that you are curious about, please don’t hesitate to call our office. Additionally, should you wish to review your financial plan please reach out to your financial advisor or call the office at 856.690.9232
Individual Income Tax Planning
Standard deductions
| Amounts | 2022 | 2023 |
|---|---|---|
| Married filing jointly or surviving spouse | $25,900 | $27,700 |
| Head of household | $19,400 | $20,800 |
| Unmarried | $12,950 | $13,850 |
| Married filing separately | $12,950 | $13,850 |
| Dependent–Standard deduction cannot exceed the greater of: | $1,150 or $400 + earned income | $1,250 or $400 + earned income |
| Additional deduction for aged or blind (single or head of household) | $1,750 | $1,850 |
| Additional deduction for aged or blind (all other filing statuses) | $1,400 | $1,500 |
Single taxpayers
| If taxable income is: | Your tax is: |
|---|---|
| Not over $11,000 | 10% of taxable income |
| Over $11,000 to $44,725 | $1,100 + 12% of the excess over $11,000 |
| Over $44,725 to $95,375 | $5,147 + 22% of the excess over $44,725 |
| Over $95,375 to $182,100 | $16,290 + 24% of the excess over $95,375 |
| Over $182,100 to $231,250 | $37,104 + 32% of the excess over $182,100 |
| Over $231,250 to $578,125 | $52,832 + 35% of the excess over $231,250 |
| Over $578,125 | $174,238.25 + 37% of the excess over $578,125 |
Married filing jointly and surviving spouses
| If taxable income is: | Your tax is: |
|---|---|
| Not over $22,000 | 10% of taxable income |
| Over $22,000 to $89,450 | $2,200 + 12% of the excess over $22,000 |
| Over $89,450 to $190,750 | $10,294 + 22% of the excess over $89,450 |
| Over $190,750 to $364,200 | $32,580 + 24% of the excess over $190,750 |
| Over $364,200 to $462,500 | $74,208 + 32% of the excess over $364,200 |
| Over $462,500 to $693,750 | $105,664 + 35% of the excess over $462,500 |
| Over $693,750 | $186,601.50 + 37% of the excess over $693,750 |
Retirement & Investment Planning:
Employee/individual contribution limits
| Elective deferral limits | 2022 | 2023 |
|---|---|---|
| 401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs * [Includes Roth 401(k) and Roth 403(b) contributions] | Lesser of $20,500 or 100% of participant’s compensation | Lesser of $22,500 or 100% of participant’s compensation |
| SIMPLE 401(k) plans and SIMPLE IRA plans* | Lesser of $14,000 or 100% of participant’s compensation | Lesser of $15,500 or 100% of participant’s compensation |
*Reminder: You must aggregate employee contributions to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers. 457(b) plan contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively, a 20% maximum contribution
| IRA contribution limits | 2022 | 2023 |
|---|---|---|
| Traditional IRAs | Lesser of $6,000 or 100% of earned income | Lesser of $6,500 or 100% of earned income |
| Roth IRAs | Lesser of $6,000 or 100% of earned income | Lesser of $6,500 or 100% of earned income |
| Additional “catch-up” limits (individuals age 50 or older) | 2022 | 2023 |
|---|---|---|
| 401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs2 | $6,500 | $7,500 |
| SIMPLE 401(k) plans and SIMPLE IRA plans | $3,000 | $3,500 |
| IRAs (traditional and Roth) | $1,000 | $1,000 |
Compensation limits/thresholds
| Traditional deductible IRA income limits — Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers covered by an employer-sponsored plan and filing as: | 2022 | 2023 |
|---|---|---|
| Single | $68,000 – $78,000 | $73,000 – $83,000 |
| Married filing jointly | $109,000 – $129,000 | $116,000 – $136,000 |
| Married filing separately | $0 – $10,000 | $0 – $10,000 |
| Roth IRA compensation limits — Income phase-out range for determining ability to fund Roth IRA for taxpayers filing as: | 2022 | 2023 |
|---|---|---|
| Single | $129,000 – $144,000 | $138,000 – $153,000 |
| Married filing jointly | $204,000 – $214,000 | $218,000 – $228,000 |
| Married filing separately | $0 – $10,000 | $0 – $10,000 |
Investment Planning
Maximum tax on long-term capital gains and qualified dividends
| 0% rate applies (taxable income thresholds) | 2022 | 2023 |
|---|---|---|
| Single | Up to $41,675 | Up to $44,625 |
| Married filing jointly | Up to $83,350 | Up to $89,250 |
| Married filing separately | Up to $41,675 | Up to $44,625 |
| Head of household | Up to $55,800 | Up to $59,750 |
| 15% rate applies (taxable income thresholds) | 2022 | 2023 |
|---|---|---|
| Single | $41,675 to $459,750 | $44,625 to $492,300 |
| Married filing jointly | $83,350 to $517,200 | $89,250 to $553,850 |
| Married filing separately | $41,675 to $258,600 | $44,625 to $276,900 |
| Head of household | $55,800 to $488,500 | $59,750 to $523,050 |
Protection Planning
Flexible spending account (FSA) for healthcare
| Health care FSAs | 2022 | 2023 |
|---|---|---|
| Maximum salary reduction contribution | $2,850 | $3,050 |
Health Savings Accounts (HSAs)
| Annual contribution limit | 2022 | 2023 |
|---|---|---|
| Self-only coverage | $3,650 | $3,850 |
| Family coverage | $7,300 | $7,750 |
| High deductible health plan–self-only coverage | 2022 | 2023 |
|---|---|---|
| Annual deductible–minimum | $1,400 | $1,500 |
| Annual out-of-pocket expenses required to be paid (other than for premiums) can’t exceed | $7,050 | $7,500 |
| High deductible health plan–family coverage | 2022 | 2023 |
|---|---|---|
| Annual deductible–minimum | $2,800 | $3,000 |
| Annual out-of-pocket expenses required to be paid (other than for premiums) can’t exceed | $14,100 | $15,000 |
| Catch-up contributions | 2022 | 2023 |
|---|---|---|
| Annual catch-up contribution limit for individuals age 55 or older | $1,000 | $1,000 |
Education Planning
Deduction for student loan interest
| Education loan interest deduction | 2022 | 2023 |
|---|---|---|
| Maximum deduction for interest paid on qualified education loans | $2,500 | $2,500 |
| MAGI phaseout range | 2022 | 2023 |
|---|---|---|
| Single–phaseout threshold amount | $70,000 | $75,000 |
| Single–completed phaseout amount after | $85,000 | $90,000 |
| Married filing jointly–phaseout threshold amount | $140,000 | $155,000 |
| Married filing jointly–completed phaseout amount after | $170,000 | $185,000 |
Gift tax exclusion
| Gift tax | 2022 | 2023 |
|---|---|---|
| Annual gift tax exclusion–single individual | $16,000 | $17,000 |
| Annual gift tax exclusion–joint gift | $32,000 | $34,000 |
| Lump-sum gift to 529 plan–single individual | $80,000 | $85,000 |
| Lump-sum gift to 529 plan–joint gift | $160,000 | $170,000 |