February 8, 2023

Unitranche

Supportive Business Potential

5 tax, investment changes that could boost your finances in 2023

1. Bigger contribution limits on retirement accounts

But without a reminder from an advisor or your 401(k) plan provider, these increases “might go undetected,” he said. 

The contribution limits have also increased for IRAs, allowing you to save up to $6,500 for 2023, up from $6,000 in 2022. While the catch-up deposit remains at $1,000 for 2023, it will index to inflation starting in 2024.

2. Tax savings with inflation-adjusted brackets

The standard deduction also increases in 2023, rising to $27,700 for married couples filing jointly, up from $25,900 in 2022. Single filers may claim $13,850 in 2023, a jump from $12,950.

3. Higher threshold for 0% long-term capital gains

With higher standard deductions and income thresholds for long-term capital gains in 2023, you’re more likely to fall into the 0% bracket, Lucas said. 

For 2023, you may qualify for the 0% rate with taxable income of $44,625 or less for single filers and $89,250 or less for married couples filing together.

4. Higher income limit for Roth IRA contributions

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More Americans may be eligible in 2023 because the adjusted gross income phaseout range rises to between $138,000 and $153,000 for single filers and $218,000 and $228,000 for married couples filing jointly.

While some investors may seek “complicated” moves, like so-called backdoor Roth conversions, which transfer after-tax 401(k) contributions to a Roth IRA, Pon urges investors to double-check Roth IRA contribution eligibility first. 

5. More time for required minimum distributions