Tax season is upon us and now is the time to prepare!
Recently we’ve experienced record-high inflation rates, rising interest rates, and stock market volatility. It’s no surprise that all these factors will have an impact on taxes. Here are some of the key tax changes for 2023 that you should know about:
Higher contribution limits for your 401(k) and individual retirement account
“In 2023, the employee deferral limit is $22,500, up from $20,500, and catch-up deposits for savers age 50 and older jump to $7,500, up from $6,500. These increases also apply to 403(b) plans, most 457 plans, and Thrift Savings Plans.”1
More time for required minimum distributions (RMDs)
“SECURE 2.0 shifts the starting RMD age from 72 to 73 in 2023 and age 75 in 2033.”1
Tax savings with inflation-adjusted brackets
Tax brackets have inflation increases each year based on the cost of living adjustments. “As the numbers go up, the adjustment hits on a larger amount. So, you can push a lot more income into 2023 and stay at a low bracket.”2
Long-term capital gains taxes
“For 2023, you’ll pay a 15 percent tax on long-term capital gains once your income hits $44,625 if you’re single, $59,750 if you’re head of household, and $89,250 if you’re married and file jointly. If your income falls below those limits, you don’t owe any long-term capital gains tax.”3
Taxes are a crucial component of your retirement strategy so it’s important to get it right. To help you through the process, here is a 2023 tax guide. Our goal is to help you create a tax strategy with the goal of reducing your tax burden in retirement. Contact our office at (336) 450-2161 with any questions or to schedule a complimentary consultation. We look forward to helping you!
Corey R. Hodges
Fortified Futures Wealth & Retirement Advisors
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