2023 Tax Brackets, Social Security Benefits Increase, and Other Inflation Adjustments for 2023
The IRS and Social Security Administration recently announced changes for 2023. Here are some highlights:
- The SSA has announced that benefit checks will rise 8.7% in 2023, the highest increase in 41 years. Social Security and SSI beneficiaries are normally notified by mail starting in early December about their new benefit amount. The fastest way to find out your new benefit amount is to access your personal mySocial Security account to view the COLA notice online.
- The standard deduction (used instead of itemized deductions) will increase by $900 for single filers and $1800 for joint filers.
- The tax brackets on qualified stock dividends and long-term capital gains will increase by 7%:
- The retirement plan contribution limit for employees who participate in a 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $22,500 for young workers and $30,000 for those aged 50 and over (which includes the new $7,500 catch up contribution limit)
- The limit on annual contributions to an IRA will increase to $6,500, up from $6,000. The IRA catch-up limit remains at $1,000.
- The income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $138,000 and $153,000 for singles and heads of households. For married couples filing jointly, the income phase-out range is between $218,000-$228k. DETAILS HERE.
- Health Savings Account (HSA) contribution limits for 2023 will be $3,850 for self-only coverage and $7,750 for family coverage.
- The dollar limit for flexible spending arrangements (FSA) increases to $3,050.
- Estates of decedents who die during 2023 have a basic exclusion amount of $12,920,000, up from a total of $12,060,000 for estates of decedents who died in 2022.
- The annual exclusion for gifts increases to $17,000 for the calendar year 2023, up from $16,000 for the calendar year 2022.
- If you would like to read more about the 2023 changes from the IRS here is the IRS Publication and summary at the Tax Foundation website.
- For help estimating your taxes or withholding:
- For more information on Roth IRAs: Conversions, Mega Back-Door, Tax Calculations, and Recent Legislation, check out MainStreet’s upcoming Chalk Talk on November 15th