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Key Retirement and Tax Numbers for 2023

Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption, and threshold amounts. Here are a few of the key adjustments for 2023.



Estate, Gift, and Generation-Skipping Transfer Tax

Standard Deduction

A taxpayer can generally choose to itemize certain deductions or claim a standard deduction on the federal income tax return. In 2023, the standard deduction is:

The additional standard deduction amount for the blind and those age 65 or older in 2023 is:

Special rules apply for those who can be claimed as a dependent by another taxpayer.

IRAs

The combined annual limit on contributions to traditional and Roth IRAs is $6,500 in 2023 (up from $6,000 in 2022), with individuals age 50 or older able to contribute an additional $1,000. The limit on contributions to a Roth IRA phases out for certain modified adjusted gross income (MAGI) ranges (see chart). For individuals who are active participants in an employer-sponsored retirement plan, the deduction for contributions to a traditional IRA also phases out for certain MAGI ranges (see chart). The limit on nondeductible contributions to a traditional IRA is not subject to phaseout based on MAGI.
 


MAGI Ranges: Contributions to a Roth IRA. Single/Head of household: 2022 $129,000 - $144,000; 2023 $138,000 - $153,000. Married filing jointly: 2022 $204,000 - $214,000; 2023 $218,000 - $228,000. Married filing separately: 2022 $0 - $10,000; 2023 $0 - $10,000. MAGI Ranges: Deductible Contributions to a Traditional IRA. Single/Head of household 2022 $68,000 - $78,000; 2023 $73,000 - $83,000. Married filing jointly: 2022 $109,000 - $129,000; 2023 $116,000 - $136,000.

Note:
The 2023 phaseout range is $218,000–$228,000 (up from $204,000–$214,000 in 2022) when the individual making the IRA contribution is not covered by a workplace retirement plan but is filing jointly with a spouse who is covered. The phaseout range is $0–$10,000 when the individual is married filing separately and either spouse is covered by a workplace plan.


Employer-Sponsored Retirement Plans

Kiddie Tax: Child’s Unearned Income

Under the kiddie tax, a child’s unearned income above $2,500 in 2023 (up from $2,300 in 2022) is taxed using the parents’ tax rates.

This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek guidance from an independent tax or legal professional. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2023 Broadridge Financial Solutions, Inc.

Securities and advisory services offered through Cetera Advisors LLC, member FINRA, SIPC. Cetera is under separate ownership from any other named entity.

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