Although many of the headlines and news stories we’ve seen have painted inflation as the enemy, there is a sliver lining to recent high inflation rates. High inflation is triggering some pretty big changes to tax laws. Tax brackets, standard deductions, retirement plan contribution limits, among others are receiving large increases to keep pace with inflation. Let’s review the changes coming in 2023 to IRS limits.

Retirement Plan Contribution Limits - 2022 vs. 2023

2022

2023

*2022 Compensation Limit for employer retirement plan deferral - $305,000

*2023 Compensation Limit for employer retirement plan deferral - $330,000

Income Phaseout Limits 2023

Deductible Traditional IRA contribution phase out ranges for 2023

• $73,000 to $83,000 - Single taxpayers covered by a workplace retirement plan ($5,000 increase).
• $116,000 to $136,000 - Married couples filing jointly. This applies when the spouse making the IRA contribution is covered by a workplace retirement plan ($7,000 increase).
• $218,000 to $228,000 - A taxpayer not covered by a workplace retirement plan married to someone who's covered ($14,000 increase).
• $0 to $10,000 - Married filing a separate return. This applies to taxpayers covered by a workplace retirement plan (no change).

Roth IRA contribution phase-out ranges for 2023

• $138,000 to $153,000 - Single taxpayers and heads of household ($9,000 increase).
• $218,000 to $228,000 - Married, filing jointly ($14,000 increase).
• $0 to $10,000 - Married, filing separately (no change)

*Above thresholds represent taxpayer's modified adjusted gross income

Estate/Gift Tax Limits

Annual Gift Tax Exclusion Amount

• 2022: $16,000 per individual
• 2023: $17,000 per individual

Basic Exclusion Amount for Federal, Gift, and Generation-Skipping Transfer Tax

• 2022: $12,060,000 per individual
• 2023: $12,920,000 per individual

Standard Deductions/Taxable Social Security

Taxable Social Security Benefits

*2022 Social Security Tax Wage Base - $147,000

*2023 Social Security Tax Wage Base - $160,200

2023 Tax Rates 

Capital Gains Tax Rate

Income Tax Brackets