Inflation impacts all of us, mostly in an unpleasant way. We have all seen the higher prices at the pump and in the grocery store. But the news isn't all bad. Higher inflation also means other things adjust as well. Those include tax provisions, retirement plan contribution limits, and Social Security. These are the key changes for 2023.
Watch Now: Key Changes for 2023
- 0:00 - Intro
- 0:23 - YouTube Updates
- 0:44 - Key Tax Changes for 2023
- 3:18 - How this saves you money
- 4:45 - Key changes for Social Security and Medicare in 2023
- 7:02 - Key Changes to Contribution Limits
- 8:51 - Other changes you need to know.
- 10:00 - Winning the giant Powerball jackpot
- 11:30 - Outro
Please Subscribe to our YouTube Channel - @CommonwealthFinancial
One thing you can do to help us get our message out to more people is to subscribe to our YouTube Channel. The more subscribers and likes we have, the more often our videos will appear. Please take a moment to subscribe by hitting the button.
Key Tax Changes for 2023
A higher CPI means bigger changes to the tax brackets and the standard deduction. These limits will increase significantly next year. This means more of your income will be taxed at lower rates, resulting in some savings.
The standard deduction for married couples increases by $1,800 for couples filing joint returns and $900 for single filers. Tax brackets also change.
Here is a simplified example of how this can save you money on your tax bill.
Key Changes to Social Security and Medicare
Since 1976, Social Security benefits have been adjusted annually for inflation. Some years the boost was minimal, and there were even a few years when there were no adjustments at all. This year your Social Security benefits will increase the largest amount in over 40 years. The announced increase is 8.;7%. In addition, your Medicare Part-B premiums are actually going down in 2023. Here is an example.
Key Changes to Contribution Limits
The maximum amount you can save in a retirement plan will also jump in 2023. Here is a summary
Other Key Changes for 2023
Here are some other key changes you need to know for next year.
- Increased Health Savings Account contribution limits - Single plans: $3,850, family plans: $7,750
- Limits for the Income Related Monthly Adjustment Amounts for Medicare premiums.
- The amount of your earnings subjected to Social Security Taxes.
If you have any questions about how these changes could affect you, please connect with one of our advisors below.
Appearing in this video.
Tyler Szafran, CRPC®
Tyler is a financial advisor in Wheeling, WV.
Neal Watson, CFP®
Neal is a Certified Financial Planner Professional in Marietta, Ohio.