Tax Reference Guide: Key Changes For 2023
By TRG Advisors on January 24, 2023
It’s tax season! Tuesday, April 18 is the IRS tax filing deadline this year.
As tax planning conversations commence with our team and your tax professionals for 2023, make note of a few key changes and inflation adjustments by the IRS.
Standard Deductions Change:
• According to the IRS, the standard deduction for married filing jointly will rise to $27,700 in 2023, increased by $1,800 from 2022.
• For single taxpayers and married individuals filing separately, the standard deduction has risen to $13,850, increased by $900 from 2022.
• For heads of households, the standard deduction will rise to $20,800, increased by $1,400 from 2022.
Federal Tax Brackets:
• For 2023, the tax rates will remain unchanged at 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, the income brackets have been adjusted to account for inflation.
Retirement Plan Contributions:
• In 2023, the IRS has raised the contribution limits for a 401k and 403b to $22,500 – up by $2,000. Meanwhile, workers who are older than 50 years old are eligible for an extra catch-up contribution of $7,500, up by $1,000 from 2022.
IRAs:
• Contribution levels for IRAs in 2023 have increased $500. The total contribution you can make this year is $6,500, or $7,500 for those 50 or older.
Gift Tax Exemption:
• The annual gift tax exclusion will increase to $17,000, increased by $1,000 from 2022. As a result, individuals will be able to give $17,000 per year ($34,000 for a married couple) to any number of persons tax-free.
Below is a comprehensive tax reference guide covering filing dates, tax rate schedules, and deductions. Please do not hesitate to contact us should you have any questions. As always, we look forward to assisting you this tax season.