New Year, New Contribution Limits
We’re almost to the new year, which means tax season is upon us. If you are trying to maximize your financial benefits, it is important that you and/or your trusted advisors keep up with the annually changing limits. As you prepare 2022 taxes and plan for 2023 it is worth noting the IRS has updated some of its contribution and gifting limits for 2023.
Keep in mind the IRS does have guidelines and limits based on your income, tax-filing status, and other factors.
For 2023, the IRA contribution limit has increased to $6,500 for both traditional and Roth contributions. If you’re age 50 or older, you can contribute an additional $1,000 as a catch-up contribution.
For your retirement plan through your employer, such as a 401(k), 403(b), or TSP, the contribution limit is increasing to $22,500. Catch-up contributions are also permitted if you’re age 50 or older. The catch-up contribution for 2023 has increased to $7,500.
Before making any changes, it’s a good idea to contact a tax professional and/or your financial advisor to ensure you are making the best decision for your personal financial situation.
You do have until the tax filing deadline in April to make 2022 Traditional and Roth IRA contributions. Contact your Payroll Administrator to make changes to your employer plan.
Happy Holidays from BCR Wealth!