Even the darkest clouds can have a little silver lining them. Last week, we discussed the IRS’ inflation adjustments for 2022 taxes.

And with the issuance of Revenue Procedure 2022-38, the IRS has announced inflation-adjusted tax brackets, standard deductions, estate exemptions, and more for 2023.

Income Tax Brackets – 2022 – 2023:

Other Increases:

• The standard deduction is also increased – for individuals, to $13,850 for 2023 from $12,950 for 2022; for married joint filers to $27,700 from $25,900 for 2022.
• The annual gift tax exclusion will rise to $17,000 from 2022’s $16,000 limit.
• The estate tax threshold will increase to $12,920,000 per individual from $12,060,000 in 2022.
• The Alternative Minimum Tax (AMT) exemption for 2023 is $81,300 for individuals and $126,500 for married couples filing jointly, up from $75,900 and $118,100, respectively, for 2022. Phasing out begins at $578,150 for individuals and $1,156,300 for married joint filers, compared with $539,900 and $1,079,800 in 2022, respectively.
• The foreign earned income exclusion is $129,000 for 2023, up from $112,000 for 2022.

These, of course, are only some of the significant changes the IRS has announced for 2023. Most tax credit limitations have been increased for 2023, though some items are by statue not indexable to inflation.

There may be opportunities to leverage these increases to find you ways to keep even more of your hard-earned money – consult with your CPA/financial planner to develop the best strategy (or strategies) for you and your family.

If you are interested in developing new tax planning and estate strategies for 2023, please click here to email us directly – let us know how we can help.

Until next time –

Peace,

Eric