2023
Please be aware that a large number of individual tax items of the 2018 Tax Act sunset in 2025.
New Alimony Rules: For Agreements executed or modified after 12/31/2018, alimony received is not income and alimony paid is not a deduction. However, parties can elect to follow any new rules that will be effective in 2026 as long as indicated in executed agreement.
Auto Mileage Rates for 2023: Released December 29, 2022
Business—65.5 cents per mile
Charity—14 cents per mile
Medical—22 cents per mile
Moving - 22 cents per mile
Gift Exclusion Annual Amount for 2023:
$17,000
Foreign Earned Income Exclusion Annual Amount for 2023:
$120,000
Long-Term Care Insurance Premium Limits for 2023:
Age 40 or less: $ 480
More than 40, less than 51: $ 890
More than 50, less than 61: $1,790
More than 60, less than 71: $4,770
More than 70: $5,960
HSA contribution amounts for 2023:
Individual— $3,850 (+$1,000 for over age 55)
Family— $7,750 (+$1,000 for over age 55)
Compensation limits (401, 404, 408) for 2023:
$330,000
Certain expenses of elementary and secondary schoolteachers for 2023:
$300
Election to Expense Certain Depreciation Assets (Section 179) for 2023:
$1,160,000 (limit on capital purchases: $2,890,000). Maximum Sport Utility Vehicle cost is limited to $28,900.
Standard Deductions for 2023:
$27,700 (MFJ, Surviving Spouse);
$20,800 (HOH); and $13,850 (Single, MFS).
Additional deduction for aged or blind is $1,500 ($1,850 for unmarried taxpayers).
Additional Medicare Tax for 2023:
3.8% surtax on net investment income and 0.9% Medicare contributions tax on earned income when adjusted gross income exceeds:
MFJ, Surviving Spouse — $250,000;
HOH and Single — $200,000;
MFS — $125,000
Deduction for Pass-through (includes Sole Shareholders) Entities:
20% of Qualified Business Income (QBI) limited to 50% of W-2 Wages or 25% of wages and 2.5% of Qualified Property Unadjusted Basis. Income limitations for service industries. QBI thresholds are $364,200 (MFJ); $182,100 (S/HOH/MFS).
Medicare Coverage and Part D Costs for 2023 (based on 2021 income):
– Monthly Medicare payments are $164.90 for MAGI under $97,000 for Single/MFS and under $194,000 for MFJ. Medicare Part D Premiums are set at plan premium at this level.
– Monthly Medicare payments are $230.80 for MAGI above $97,000 up to $123,000 for Single and above $194,000 up to $246,000 for MFJ. Monthly Medicare Part D Premiums are set at plan premium plus $12.20 at this level.
– Monthly Medicare payments are $329.70 for MAGI above $123,000 up to $153,000 for Single and above $246,000 up to $306,000 for MFJ. Monthly Medicare Part D Premiums are set at plan premium plus $31.50 at this level.
– Monthly Medicare payments are $428.60 for MAGI above $153,000 up to $183,000 for Single and above $603,000 up to $366,000 for MFJ. Monthly Medicare Part D Premiums are set at plan premium plus $50.70 at this level.
– Monthly Medicare payments are $527.50 for MAGI above $183,000 up to $500,000 for Single; above $366,000 up to $750,000 for MFJ; and above $97,000 up to $403,000 for MFS. Monthly Medicare Part D Premiums are set at plan premium plus $70.00 at this level.
– Monthly Medicare payments are $560.50 for MAGI above $500,000 for Single; above $750,000 for MFJ; and above $403,000 for MFS. Monthly Medicare Part D Premiums are set at plan premium plus $76.40 at this level.
Depreciation Component: Released December 29, 2022
For business purposes of standard mileage rates are:
24 cents in 2015 and 2016;
25 cents in 2017 and 2018;
26 cents in 2019;
27 cents in 2020;
26 cents in 2021;
26 cents in 2022;
and 28 cents in 2023
Estate and Gift Lifetime Exclusion for 2023:
$12.92 million ($25.84M for spousal portability election)
Social Security Numbers for 2023:
Wage Limit: $160,200
Quarter of Coverage: $1,640
Retirement Earnings Tax Exempt Amounts if under retirement age: $21,240/yr ($1,770/mo). Can earn $21,240 in 2023 before their benefits are reduced by $1 for every $2 in excess earnings.
Retirement Earnings Tax Exempt Amounts for year attaining retirement age before birth date: $56,520/yr ($4,710/mo). Benefit Reduction for months prior to full retirement age: $1 of benefits for every $3 earnings over limit
FSA contribution amounts for 2023:
$3,050. Maximum carryover amount is $610.
Retirement Deferrals for 2023:
401(k) — $22,500 (age 50 and over catch-up is $7,500)
Simple — $15,500 (age 50 and over catch-up is $3,500)
IRA — $6,500 (age 50 and over catch-up is $1,000)
Defined Contribution Plan — $66,000
Child Tax Credit in 2023:
$2,000 for children under 17 years of age. Maximum refundable portion per child of $1,600. Other dependents qualify for a $500 nonrefundable credit.
Bonus Depreciation in First Year:
80% for assets placed in service in 2023;
60% for 2024;
40% for 2025;
20% for 2026;
and 0% for 2027.
Alternative Minimum Tax for 2023:
For 2023, the exemption amounts are $81,300 (Single/HOH); $126,500 (MFJ) and $63,250 for (MFS) and do not phase out until $578,150 (Single/HOH/MFS) and $1,156,300 (MFJ). The exemption amount for estates and trusts is $28,400. The 28% rate applies to excess AMTI of $220,700 (MFJ/HOH/Single) and $110,350 (MFS)
ACA Penalty for 2023:
For 2023, the penalty for not maintaining minimum essential health coverage: $0
Capital Gains Tax Brackets for 2023:
0% for income $0 to $44,625 (Single);
$0 to $89,250 (MFJ); and $0 to $59,750 (HOH)
15% for income $44,626 to $492,300 (Single): $89,251 to $553,850 (MFJ); and $59,751 to $523,050 (HOH)
20% for income over $492,300 (Single); over $553,850 (MFJ); and over $523,050 (HOH)