2023 Taxes: 4 Things to Know Now

2023 Taxes: 4 Things to Know Now

February 06, 2024

As we enter 2024, here are four tax changes everyone should know about as you prepare to file your 2023 taxes.

IRA and 401(k) limits are higher

If you are funding a Traditional 401k/403b/457 plan through work, the contribution limit has increased to $23,000. If you are over 50, you can make a catch-up contribution of $7,500, bringing the total amount to $30,500. If you are funding a Traditional IRA or Roth, the maximum contribution limit has increased to $7,000; if you are over 50, the limit is $8,000. If you are funding both an IRA and Roth, keep in mind that these limits apply to the total for contributing to both; you are not able to fund both by $7,000. 

The standard deduction increased

The standard deduction will be increasing this year, too. If you are a single filer, the new amount is $14,600 and the married filing jointly amount is now $29,200. If you file single and are over 65 or blind, you receive an additional $1,950; if you are over 65 and blind, the amount increases to $3,900. If you are married and filing jointly, or separately, and are over 65 or blind, each qualifying individual receives an additional $1,550. If you are over 65 and blind, each qualifying individual receives $3,100. 

Source: Internal Revenue Service, "Revenue Procedure 2023-24. 

FSA (Flexible Spending Account) or HSA (Health Saving Account) limits increased

If you are funding an FSA (Flexible Spending Account) or HSA (Health Saving Account), the limits will be increasing, as well. For an FSA, the maximum contribution is $3,200. For an individual funding an HSA, the maximum is $4,150, and it is now $8,300 for families. If you are over 55, you qualify for an additional $1,000 contribution. 

Annual gift tax exclusion amount increased

Lastly, the annual gift tax exclusion amount increased to $18,000 per person for 2024. If you plan on gifting more than $18,000 to one individual (or $36,000 if you are a married couple gifting to one individual), please consult your advisor and accountant to discuss any tax ramification. 

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These are only a few of the tax changes for 2024. As always, if you have any questions, or would like to learn more about additional tax changes, please reach out to us. I hope you have a happy and healthy 2024! 

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.