Retirement Account Inflation Adjustments for 2023:
Qualified Accounts
2023 contribution limits for your 401(k), 403(b), or a 457 plan have increased from $20,500 to $22,500. Additionally, if you are age 50 or older, you are eligible for a “catch-up” contribution which will increase from $6,500 to $7,500 a year.
2022
2023
Under Age 50 Contribution Limit
$20,500
$22,500
Over Age
50 Contribution Limit
$27,000
$30,000
The 2023 contribution limits for an IRA or Roth IRA will increase from $6,000 to $6,500, plus a $1,000 catch-up contribution for individuals over age 50. Contributions to an IRA can be tax deductible if you do not have a qualified plan, regardless of your Adjusted Gross Income (AGI). However, if you (or your spouse) are eligible for a qualified plan, your contribution may be deductible based on the following AGI amounts:
2023 Traditional IRA AGI Limits:
Single or Head of Household: $73,000 – $83,000
Married Filing Jointly (and you’re covered by a retirement plan at work) $116,000 -$136,000
Married Filing Jointly (and your spouse is covered by a retirement plan at work) $218,000 -$228,000
Married Filing Separately: $0 – $10,000
2023 Roth IRA AGI limits:
Single or Head of Household: $138,000 – $153,000
Married Filing Jointly: $218,000 – $228,000
Married Filing Separately: $0 – $10,000
2023 SIMPLE IRA Contribution limits:
The maximum deferral has increased from $14,000 to $15,500
2023 SEP IRA Contribution limits:
The maximum deferral has increased from $61,000 to $66,000
The minimum compensation amount has increased from $650 to $750
Defined Contribution Plans –
The 2023 defined contribution plan funding has increased from $61,000 to $66,000.
Defined Benefit Plans –
The 2023 limitation on the annual benefit has increased from $245,000 to $265,000.
Health care savings accounts (HSA) –
If you have a high-deductible health insurance plan, you are eligible to contribute to an HSA. For 2023, a single taxpayer can contribute $3,850 and family coverage is $7,750. In addition, there is a catch-up contribution of $1,000 for anyone who is age 55 or older.
Gift and Estate Tax Changes for 2023:
The 2023 per beneficiary gift-tax exclusion has increased from $16,000 to $17,000.
The gift and estate tax lifetime exclusion has increased from $12,060,000 to $12,920,000.
Gifts to a non-spouse U.S. citizen has increased from $164,000 to $175,000.
< COMMENTARY
Updates | October 25, 2022
2023 Tax Updates
By Kenneth J. Dean CPA, CFP®, CFA, MST
Senior Director, Financial Planning
Retirement Account Inflation Adjustments for 2023:
Qualified Accounts
2023 contribution limits for your 401(k), 403(b), or a 457 plan have increased from $20,500 to $22,500. Additionally, if you are age 50 or older, you are eligible for a “catch-up” contribution which will increase from $6,500 to $7,500 a year.
The 2023 contribution limits for an IRA or Roth IRA will increase from $6,000 to $6,500, plus a $1,000 catch-up contribution for individuals over age 50. Contributions to an IRA can be tax deductible if you do not have a qualified plan, regardless of your Adjusted Gross Income (AGI). However, if you (or your spouse) are eligible for a qualified plan, your contribution may be deductible based on the following AGI amounts:
2023 Traditional IRA AGI Limits:
2023 Roth IRA AGI limits:
2023 SIMPLE IRA Contribution limits:
2023 SEP IRA Contribution limits:
Defined Contribution Plans –
The 2023 defined contribution plan funding has increased from $61,000 to $66,000.
Defined Benefit Plans –
The 2023 limitation on the annual benefit has increased from $245,000 to $265,000.
Health care savings accounts (HSA) –
If you have a high-deductible health insurance plan, you are eligible to contribute to an HSA. For 2023, a single taxpayer can contribute $3,850 and family coverage is $7,750. In addition, there is a catch-up contribution of $1,000 for anyone who is age 55 or older.
Gift and Estate Tax Changes for 2023:
The 2023 per beneficiary gift-tax exclusion has increased from $16,000 to $17,000.
The gift and estate tax lifetime exclusion has increased from $12,060,000 to $12,920,000.
Gifts to a non-spouse U.S. citizen has increased from $164,000 to $175,000.