What You Need to Know for the 2023 Tax Season

What You Need to Know for the 2023 Tax Season

In 2023, the maximum amount of money you can save in most workplace retirement accounts — pretax — will be $22,500, up from $20,500 in 2022. The cap on annual I.R.A. contributions will be $6,500, up from $6,000.

The tax brackets have changed, too. For people in the 24 percent federal tax bracket, for instance, that rate will kick in for incomes over $95,375 in 2023, or $190,750 if you’re married and filing your taxes jointly. That’s up from $89,075 for single individuals and $178,150 for married couples filing jointly in 2022. There are similar changes in other brackets.

Not everything is subject to such adjustments. People age 50 and over in most workplace retirement plans can save an extra $7,500 in 2023 beyond the normal $22,500 cap, up from $6,500 in 2022. Cost-of-living changes to these so-called catch-up contributions do not apply to I.R.A.s, however. There, the extra savings for the 50-and-up group remain at $1,000.

In the world of tax-advantaged flexible spending accounts, the cap on the money you can set aside in a health care one is $3,050 in 2023, up from $2,850 in 2022. But dependent care accounts don’t change; the cap there stays at $5,000 per household, where it’s been for decades. States tend not to adjust tax breaks for their 529 college savings accounts either.

If you get paid through online payment processors like Venmo, PayPal or eBay, there are some changes coming, but the I.R.S. pushed back the effective date to Jan. 1, 2023.

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