PUBLISHER’S NOTE: After publishing this blog on December 17, 2022, the I.R.S. made a change as to the effective date for the “gig-tax” rule discussed. Please read the update here.
Highlights of the New Tax Law Changes for 2023
With 2023 fast approaching, it is time to look at changes to income tax rules and regulations for 2023 and how they may affect you.
As is usually the case, 2023 will bring annual inflation adjustments to many tax provisions. Some of the more notable ones are as follows: the standard deduction for married couples filing jointly rises to $27,700 from $25,900 and for single individuals, up to $13,850 from $12,950; the estate tax exclusion for decedent’s estates rises to $12,920,000 from $12,060,000; and the annual exclusion for gifts increases to $17,000 from $16,000 for 2022.
One of the more significant changes applies to those who earn income through payment apps such as Venmo and PayPal. Previously, payment apps were required to send 1099s to users if their gross income through the app exceeded $20,000 or they had at least 200 transactions within the calendar year.
Now the threshold for receiving 1099s from the app will be a user whose annual income through the app exceeded $600 and regardless of the number of transactions. A user who sells one item for more than $600 will now receive a 1099 and have to report it as income.
New Retirement Contribution Limits Have Changed
Another significant change is new retirement contribution limits for 2023. The contribution limits for traditional IRAs are up to $6,500, or for those over age 50 using the catch-up contribution, up to $7,500. That is a $500 increase from 2022.
The income phase-out for Roth IRAs increases $9,000 for single filers to $138,000-$153,000 and up $14,000 for joint filers to $218,000-$228,000. The limits for 401(k), 403(b) and similar workplace accounts increase to $22,500, a change of $2,000 from 2022. Those age 50 or older will be able to contribute an additional $7,500 to such accounts.
These are just some of the highlights of the tax law changes to take effect next year. To review all of the changes, one can go to IRS.gov to find these and other revisions to look for in 2023.
Schedule an Appointment:
At Holzfaster, Cecil, McKnight & Mues, located in Dayton, Ohio, top-notch estate planning doesn’t need to be complicated or expensive! To learn more, go to our website at www.hcmmlaw.com. Or, please contact us at (937) 293-2141 to schedule an appointment for an initial consultation which can be conducted either by phone, Zoom or in person.
Please consider joining or following us!
© 2022, Ohio Family Law Blog. All rights reserved.
Joseph Balmer manages the Probate, Trust and Estate Administration department at Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has been certified by the Ohio State Bar Association as a specialist in Estate Planning, Trust and Probate Law since 2006.
