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Important Tax Figures for 2023

Important Tax Figures for 2023

Posted on January 4th, 2023

Every year, the amounts allowed for various federal tax benefits are subject to change based on inflation adjustments and legislation. Here are some tax figures for 2023, compared with 2022, including the estate tax exemption, Social Security wage base, qualified retirement plan and IRA contribution limits, driving deductions and more. Good news: Many increases are higher than in past years due to inflation.

The following table provides some important federal tax information for 2023, as compared with 2022. Many of the dollar amount increases are higher than in past years due to inflation.

Social Security/ Medicare20232022
Social Security Tax Wage Base$160,200$147,000
Medicare Tax Wage BaseNo limitNo limit
Employee portion of Social Security6.2%6.2%
Employee portion of Medicare1.45%1.45%
Individual Retirement Accounts20232022
Roth IRA Individual, up to 100% of earned income$6,500$6,000
Traditional IRA Individual, up to 100% of earned Income$6,500$6,000
Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older$1,000$1,000
Qualified Plan Limits20232022
Defined Contribution Plan limit on additions (Sections 415(c)(1)(A))$66,000$61,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A))$265,000$245,000
Maximum compensation used to determine contributions$330,000$305,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2))$22,500$20,500
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older$7,500$6,500
SIMPLE deferrals (Section 408(p)(2)(A))$15,500$14,000
SIMPLE additional “catch-up” contributions for employees age 50 and older$3,500$3,000
Compensation defining highly compensated employee (Section 414(q)(1)(B))$150,000$135,000
Compensation defining key employee (officer) in a top-heavy plan$215,000$200,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c))$750$650
Driving Deductions20232022
Business mileage, per mile65.5 cents58.5 cents from Jan. 1 to June 30
62.5 cents from July 1 to Dec. 31
Charitable mileage, per mile14 cents (the rate is set by statute)14 cents (the rate is set by statute)
Medical and eligible moving*, per mile22 cents18 cents from Jan. 1 to June 30
22 cents from July 1 to Dec. 31
Business Equipment20232022
Maximum Section 179 deduction$1.16
Phase out for Section 179$2.89
Business Meals20232022
General deduction for eligible business-related food and beverage expenses50%100%**
Transportation Fringe Benefit Exclusion20232022
Monthly commuter highway vehicle and transit pass$300$280
Monthly qualified parking$300$280
Standard Deduction20232022
Married filing jointly$27,700$25,900
Single (and married filing separately)$13,850$12,950
Heads of Household$20,800$19,400
Domestic Employees20232022
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc.$2,600$2,400
Kiddie Tax20232022
Amount used to reduce the net unearned income reported on a child’s return that’s subject to the Kiddie Tax$1,250$1,150
Estate Tax20232022
Federal estate tax exemption$12.92 million$12.06 million
Maximum estate tax rate40%40%
Annual Gift Exclusion20232022
Amount you can give each recipient$17,000$16,000

* Only available for active-duty members of the military.
** Provided by restaurants. This is part of a law signed on December 27, 2020, which provided COVID-19 relief. The 100% deduction returned to 50% in 2023.