New Tax Year, New Tax Rules

New Tax Year, New Tax Rules

December 06, 2022

As we leave 2022, we are thankful that this year of volatility has hopefully come to an end. As we approach 2023, there are some new tax code changes that may provide opportunities for you in the year to come! See them below!

Contribution Limits Increasing

ROTH IRA/IRA Contributions will increase by $500.00 per year. Meaning if you are under age 50, you will be able to contribute a total of $6,500 for 2023. If you are over 50, you will still be eligible for the $ 1,000-a-year catch-up. (This will bring your total up to $7,500 annually per person). Please note you can only contribute to these retirement plans if you have EARNED income.

ROTH IRA Phase Outs: Phase outs will increase for ROTH IRAs to $218,000- $228,000 for Married Couples.

401(K): Similarly, 401k plans will increase by $2,000 for 2023. This will bring maximum contribution limits for those under 50 to $22,500 per year per person. If you are over 50, you will receive an additional $1,000 increase which will take your catchup amount to $7,500.  

Estate Tax Threshold: The IRA has increased the estate Tax Threshold from $12.06 Million TO $12.92 Million

Annual Gift Limits: The annual gift limit for tax-free gifts will increase to $17,000 (From $16,000 in 2022).

Standard Deduction Increase: The Standard Deduction for Individuals will rise to $13,850 and for Married Couples will rise to $27,700.

We wanted to thank you all for another wonderful year and for your support. We hope 2023 brings you and your families Happiness, Joy, and Prosperity. If you have any questions about the new tax rates or adjustments, please feel free to contact me.