With every new year, some changes are expected to retirement and tax planning numbers. With high inflation and the newly passed SECURE act 2.0, 2023 has some significant changes to plan around. Below are a few key numbers to keep in mind for 2023 plus some tips for preparing for tax filing. April 18^th will be here before we know it!

2023 Retirement Plan Contribution Limits

401(k) and 403(b) contribution limit: $22,500 under age 50 ($30,000 age 50 and older)

SEP IRA contribution limit: $66,000 

SIMPLE IRA contribution limit: $15,500 under age 50 ($19,000 age 50 and older)

If you are already setup with your employer to “maximize” contributions, the increase should be automatic with your first paycheck in 2023. If you save a set dollar amount or percentage, this number may need to be recalculated for 2023 based on the new limits. Additionally, the total (employee and employer) contribution limit will increase to $66,000 for 2023. This means you may see an increase in employer funds going into your retirement accounts.

Health Savings Account (HSA) Contribution Limits

HSA contribution limits will increase to $3,850 in 2023 for single coverage and to $7,750 for family coverage. If you’re funding monthly or through payroll deductions, an adjustment may be needed to maximize 2023 contributions.

Required Minimum Distribution (RMD) Age increases to 73 starting in 2023

For those turning 72 after 12/31/2022, you now have another year before being required to take distributions from your retirement accounts. The required minimum distribution (RMD) has been raised once again. For those who turned 72 in 2022 (or earlier) you will take your RMD as previously required.

Prepare for 2022 Tax Filing

Confirm who will prepare.

Verify who will prepare your returns and/or how.  If you prepare your own returns, this may involve downloading the current version of the software to be used.  If you have a preparer, you want to confirm if there have been any changes to their position—such as a new office, new company name, etc.  

Start gathering documents.

Documents will start arriving in January, although you may receive certain documents in February or even later. Start a file folder in a convenient place to gather everything as it arrives. Certain Fidelity tax documents will arrive in late January, but most will be in the mid to late February range. As you gather documents, check against the previous year to see what, if anything, may be missing.

Make notes for your preparer

Even if you are the preparer, it is important to note if there have been any changes to your situation. For example, you may have had a change in your marital status, address, or your health that has an impact on your taxes. Moving out of state makes tax preparation very tricky. Selling a home or real estate can be complicated. Depending on the circumstances, you may decide to hire a professional preparer instead of doing it yourself.

We want to help you make this annual obligation as stress free as possible. So, if you need help with Fidelity information or have questions on your specific situation, please reach out to us.  

Mary McCraw, CFP®

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