2023 Tax Code Changes: Highlights and What You Need to Know

The IRS recently released the inflation-adjusted tax brackets for the 2023 tax year. With inflation running so high this past year, the adjustments made to the tax brackets were more substantial than we've seen in quite a while. With more changes coming that will affect tax brackets, deductions, credits, and contribution limits, we thought we'd give you a rundown of the things you should know as we wrap up 2022 and head in to the new tax year. Because not all of the changes are announced simultaneously, we'll make updates to this page as more information is available.

Brackets

The income tax brackets for 2023 were adjusted upwards by 7% to keep pace with inflation.

Standard Deduction

The standard deduction will go up by $900 for single and married-filing-separately tax filers, by $1,400 for head of household status, and by $1,800 for married couples filing jointly.

Contribution Limits

* The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $7,500, up from $6,500. Therefore, participants in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan who are 50 and older can contribute up to $30,000, starting in 2023. The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans is increased to $3,500, up from $3,000. (IRS)