Here’s a quick review of some of the tax changes you’ll see from 2022 to 2023 as a result of inflation adjustments and new tax laws.
| Provision | 2023 | 2022 | +/- |
|---|---|---|---|
| Business equipment Sec. 179 expensing deduction | $1,160,000 | $1,080,000 | +$80,000 |
| Total purchase limit for full Sec. 179 expensing deduction | $2,890,000 | $2,700,000 | +$190,000 |
| Standard mileage rate: business | 65.5¢ per mile | 58.5¢/62.5¢ per mile | +3.0¢ |
| Standard mileage rate: medical/moving | 22¢ per mile | 18¢/22¢ per mile | N/C |
| Mileage rate: charitable activity | 14¢ per mile | 14¢ per mile | N/C |
| Maximum wages subject to social security tax | $160,200 | $147,000 | +$13,200 |
| Social security earnings limit | |||
| – Under full retirement age | $21,240 | $19,560 | +$1,680 |
| – Full retirement age | No limit | No limit | N/C |
| Top estate tax rate | 40% | 40% | N/C |
| Estate tax exemption | $12,920,000 | $12,600,000 | +$320,000 |
| Annual gift tax exclusion (per donee) | $17,000 | $16,000 | +$1,000 |
| Alternative minimum tax exemption | |||
| – Single | $81,300 | $75,900 | +$5,400 |
| – Married, joint | $126,500 | $118,100 | +$8,400 |
| – Married, separate | $63,250 | $59,050 | +$4,200 |
| Maximum retirement plan contributions | |||
| – IRA for those under age 50 | $6,500 | $6,000 | +500 |
| – IRA for those 50 and over | $7,500 | $7,000 | +500 |
| – SIMPLE plan for those under age 50 | $15,500 | $14,000 | +$1,500 |
| – SIMPLE plan for those 50 and over | $19,000 | $17,000 | +$2,000 |
| – 401(k) plan for those under age 50 | $22,500 | $20,500 | +$2,000 |
| – 401(k) plan for those 50 and over | $30,000 | $27,000 | +$3,000 |
| HSA contribution limits | |||
| – Self only | $3,850 | $3,650 | +$200 |
| – Family | $7,750 | $7,300 | +$450 |
| – Additional for 55 & older | $1,000 | $1,000 | N/C |
| “Kiddie tax” threshold | $2,500 | $2,300 | +$200 |
| “Nanny tax” threshold | $2,600 | $2,400 | +$200 |
| Education savings account contribution (Coverdell) | $2,000 | $2,000 | N/C |
| American opportunity (Hope) credit limit | $2,500 | $2,500 | N/C |
| Education loan interest deduction | $2,500 | $2,500 | N/C |
| Personal exemption (suspended through 2025) | Suspended | Suspended | N/A |
| FICA & self-employment tax | |||
| Taxable wages for Social Security/Medicare | Up to $160,200 | Up to $147,000 | +$13,200 |
| Social Security/Medicare tax rate | |||
| – Employees | 7.65% | 7.65% | N/C |
| – Employers | 7.65% | 7.65% | N/C |
| – Self-employed | 15.3% | 15.3% | N/C |
| Standard deduction | |||
| – Single | $13,850 | $12,950 | +$900 |
| – Joint returns & surviving spouses | $27,700 | $25,900 | +$1,800 |
| – Married filing separately | $13,850 | $12,950 | +$900 |
| – Head of household | $20,800 | $19,400 | +$1,400 |
| – Additional for elderly or blind (married) | $1,500 | $1,400 | +$100 |
| – Additional for elderly or blind (single) | $1,850 | $1,750 | +$100 |
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