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New for 2023: Contribution limits, tax brackets, key benefit changes & more
Every year, federal agencies like the Internal Revenue Service and Social Security Administration assess the impact of inflation and the current environment on their areas of oversight. Sometimes, this results in federal benefit program changes, tweaks to tax rules and adjustments to tax-advantaged plans that are regulated by law.
To help you plan for 2023, here is a roundup of key changes that could affect how you save, spend and invest. As you review these new numbers, keep in mind that an Ameriprise Financial Advisor can help you understand what these numbers mean to you and how to adjust your financial plan accordingly.
And please note: This article is intended to be a summary of tax changes for 2023, as well as other changes like 401(k) and IRA contribution limits. It does not detail all modifications implemented by the federal government this year, nor any changes from the recently passed SECURE Act 2.0. Please reach out to your financial advisor if you have any specific questions.
In this article:
Income tax brackets — for taxable income in 2023
Income thresholds for tax brackets have increased by approximately 7% in 2023. Taxable income is calculated by subtracting your deductions from your adjusted gross income.
| Tax bracket | Single | Married filing jointly | Head of household | Married filing separately |
|---|---|---|---|---|
| 10% | $0 - $11,000 | $0 - $22,000 | $0 - $15,700 | $0 - $11,000 |
| 12% | $11,001 - $44,725 | $22,001 - $89,450 | $15,701 - $59,850 | $11,001 - $44,725 |
| 22% | $44,726 - $95,375 | $89,451 - $190,750 | $59,851 - $95,350 | $44,726 - $95,375 |
| 24% | $95,376 - $182,100 | $190,751 - $364,200 | $95,351 - $182,100 | $95,376 - $182,100 |
| 32% | $182,101 - $231,250 | $364,201 - $462,500 | $182,101 - $231,250 | $182,101 - $231,250 |
| 35% | $231,251 - $578,125 | $462,501 - $693,750 | $231,251 - $578,100 | $231,251 - $346,875 |
| 37% | $578,126+ | $693,751+ | $578,101+ | $346,876+ |
General standard deduction
| Filing status | 2022 | 2023 |
|---|---|---|
| Single | $12,950 | $13,850 |
| Married filing jointly | $25,900 | $27,700 |
| Head of household | $19,400 | $20,800 |
| Married filing separately | $12,950 | $13,850 |
Additional standard deduction for those 65+ or blind
| Filing status | 2022 | 2023 |
|---|---|---|
| Single / head of household | $1,750 | $1,850 |
| Married (joint, separate) or surviving household | $1,400 | $1,500 |
Dependent standard deduction
| 2022 | 2023 | |
|---|---|---|
| Dependent with investment income only | $1,150 | $1,250 |
| Dependent with earned income | $1,150 - $12,950 | $1,250 - $13,850 |
Estate tax exclusion amounts
| 2022 | 2023 |
|---|---|
| $12.1 million | $12.9 million |
Gift tax – annual exclusion
| 2022 | 2023 |
|---|---|
| $16,000 | $17,000 |
Looking for more information to help you prepare for tax season?
Visit our tax section to explore:
- Dates, deadlines and filing information
- Tax calculators and tools
- FAQs
401(k), 403(b), 457 plan, Thrift Savings Plan
| 2022 | 2023 | |
|---|---|---|
| Elective deferral limit | $20,500 | $22,500 |
| Additional catch-up amount for employees 50+ | $6,500 | $7,500 |
SIMPLE retirement plans
| 2022 | 2023 | |
|---|---|---|
| Elective deferral limit | $14,000 | $15,500 |
| Additional catch-up amount for individuals 50+ | $3,000 | $3,500 |
IRAs (traditional IRAs and Roth IRAs) 2023 contribution limits
For 2023, the total contributions you can make to any IRA (traditional or Roth) can’t be more than the following limits:
| 2022 | 2023 | |
|---|---|---|
| Individuals | $6,000 | $6,500 |
| Additional catch-up amount for individuals 50+* | $1,000 | $1,000 |
MAGI phase-out range — for making contributions to Roth IRAs
| 2022 | 2023 | |
|---|---|---|
| Single/head of household | $129,000 – $144,000 | $138,000 – $153,000 |
| Married couple filing jointly | $204,000 – $214,000 | $218,000 – $228,000 |
| Married individual filing a separate return who makes contributions to a Roth IRA | No change. | The phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000. |
MAGI phase-out range — for making deductible contributions to Traditional IRAs
| 2022 | 2023 | |
|---|---|---|
| Single/head of household | $68,000 – $78,000 | $73,000 – $83,000 |
| Married couple filing jointly | $109,000 – $129,000 | $116,00 – $136,000 |
| Individual not covered by a workplace retirement plan but is married to someone who is covered | $204,000 – $214,000 | $218,000 – $228,000 |
| Married individual filing a separate return who is covered by a workplace retirement plan | No change. | Phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000. |
Health Savings Accounts (HSA)
| 2022 | 2023 | |
|---|---|---|
| Individual | $3,650 | $3,850 |
| Family | $7,300 | $7,750 |
| Catch up (for those 55+)* | $1,000 | $1,000 |
Health care Flexible Spending Accounts (FSA)
| 2022 | 2023 | |
|---|---|---|
| Maximum | $2,850 | $3,050 |
| Carryover maximum | $570 | $610 |
Social Security
2023 brings a large cost of living adjustment (COLA) for Social Security. Benefits jumped 8.7% for approximately 70 million Americans in 2023. According to the Social Security Administration, benefits increased by an average more than $140 per month starting in January, affecting approximately 70 million Americans.1
| 2022 | 2023 | |
|---|---|---|
| COLA benefit increase | 5.9% increase2 | 8.7% increase |
| Maximum earnings subject to Social Security tax | $147,000 | $160,200 |
Earnings limitations for retirees
Some retirees who have begun to collect Social Security retirement benefits choose to continue working. Individuals who are younger than full retirement age, collecting Social Security retirement benefits, and continuing to work, will have some or all their Social Security benefits reduced if they earn more than certain dollar amounts.
| 2022 | 2023 | |
|---|---|---|
| Earnings limit for workers who are younger than full retirement age (benefits reduced $1 for each $2 over the earnings limit) | $19,560 | $21,240 |
| Earnings limit for people in the year they reach their full retirement age in 2023, but before the month of full retirement age (benefits reduced $1 for each $3 over the earnings limit) | $51,960 | $56,520 |
Medicare Part B premium and deductible amounts
| 2022 | 2023 | |
|---|---|---|
| Standard monthly premium | $170.10 | $164.90 |
| Annual deductible for all beneficiaries | $233 | $226 |
Medicare Part A deductible and coinsurance amounts
| 2022 | 2023 | |
|---|---|---|
| Inpatient hospital deductible | $1,566 | $1,600 |
| Daily coinsurance for days 61-90 | $389 | $400 |
| Daily coinsurance for lifetime reserve days | $778 | $800 |
Download our Medicare guide
For more Medicare information, including the 2023 IRMAA brackets, read this guide. It will help you understand Medicare and the choices available to you.
We’re always monitoring the regulatory environment
At Ameriprise, we have legal and tax professionals constantly monitoring the regulatory environment for the benefit of our clients. Know that we are keeping track of these changes and can walk you through the best way to take advantage of these adjustments considering your financial goals.
Our experts and an advisor of your choice are here to support your financial goals.
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