Dear Clients and Friends of Blue Summit,
Last week, the IRS announced increased contribution limits for IRAs and Roth IRAs for tax year 2023, as well as more favorable income limits for Roth IRAs.
The limit on annual contributions to an IRA or Roth IRA increased to $6,500 from $6,000. The catch-up contribution for those aged 50 and older remains $1,000.
The more favorable income limits for Roth IRAs allow those married filing jointly to have another $14,000 of Modified adjusted gross income and still make full contributions (table included below).
Additionally, the IRS made significant increases to 401(k) contribution limits, the largest since 1997.
For the 2023 tax year, individuals can contribute up to $22,500 to their 401(k), 403(b), Thrift Savings Plans, and most 457 plans. This is up from $20,500 for 2022. The catch-up contribution for those aged 50 and older was raised to $7,500 from $6,500. This means people 50 and over can put an additional $3,000 into their workplace plans in 2023 compared to this year.
For anyone with HSA (Health Savings Accounts), the contribution limits have increased from $3,650 in 2022 to $3,850 in 2023 for single coverage and from $7,300 in 2022 to $7,750 in 2023 for family coverage.
We hope you find this information helpful and let us know if you have any questions.
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