2023 Tax Brackets Released
For you early planners, here are the 2023 tax brackets and a few related items for the upcoming tax year. Please note this information does not affect anything before January 1, 2023. A few highlights:
1) On a Federal Level, I do not believe I have a single client who will pay an estate tax, under current law. A single taxpayer can pass on $12.92 million before paying Federal estate tax, and a couple can pass on twice as much - wouldn’t it be nice if we all had THAT problem!
2) On an annual basis one can gift $17,000 to any other individual without counting against one’s lifetime allowance.
3) Tax bracket % stay the same, but the numbers all increased a bit. This is a normal annual inflation allowance by the government.
4) Standard deduction amounts went up for each tax-paying-classification - please continue to review annually if it is actually beneficial to itemize vs. just taking the standard deduction. Most software packages will automatically apply the larger of two options, and of course if a CPA does your taxes I assume he/she is on top of all of this.
5) Again, these figures only apply to 2023 earnings for filing in April 2024. Fortunately, Fortune wrote a similar article a year ago for this year's brackets.
If this post causes any confusion or spurs any additional questions, you know where to find us.