Last year's rapid rise in inflation prompted the IRS to implement sizable adjustments to contribution limits and tax brackets. "As a result, many taxpayers could see substantial savings on their 2023 taxes," says Hayden Adams, CPA, CFP®, director of tax and wealth management at the Schwab Center for Financial Research. Here's a look at the changes that may affect you most.
Contribution limits
This year's 9.8% increase to the standard contribution limit is the largest in the 45-year history of 401(k)s.
Account type | Contribution type | 2022 | 2023 | Change |
---|---|---|---|---|
401(k), 403(b), most 457 plans | Standard contribution | $20,500 | $22,500 | +$2,000 |
Catch-up contribution (age 50+) | $6,500 | $7,500 | +$1,000 | |
Traditional and Roth IRAs | Standard contribution | $6,000 | $6,500 | +$500 |
Health savings accounts (HSAs) | Individual | $3,650 | $3,850 | +$200 |
Family | $7,300 | $7,750 | +$450 |
Roth IRA income limits
In 2023, single filers can earn 6.25% more than they did in 2022 and still contribute to a Roth IRA. For married couples filing jointly, the increase is even higher: 6.54%.1

Source: IRS.
*Contribution limits for married filing jointly are per person.
†Reduced contributions presented here are for illustrative purposes. See IRS Publication 590-A to calculate your reduced contribution based on your MAGI.
Standard deduction
This year's 6.9% increase is the largest since the standard deduction was nearly doubled in 2018 as part of the Tax Cuts and Jobs Act (TCJA).
2022 | 2023 | Change | |
---|---|---|---|
Single | $12,950 | $13,850 | +$900 |
Married filing jointly | $25,900 | $27,700 | +$1,800 |
Income tax brackets
Because of inflation adjustments to tax brackets, a single filer with taxable income of $250,000 this year will owe roughly $1,850 less in taxes than they would have in 2022, and a married couple filing jointly with taxable income of $450,000 will owe around $3,300 less.

Source: IRS.
Long-term capital gains rates
For both single filers and married couples filing jointly who owe taxes on capital gains, the threshold for the top tax bracket in 2023 is 7.1% higher than in 2022.

Source: IRS.
Gift and estate tax exclusion
The TCJA also doubled the lifetime gift and estate tax exclusion. As a result, just 0.1% of estates that filed returns in 2020 were expected to be taxed.2 This year's increase to the exclusion amounts may mean even fewer estates will face taxes in 2023.
- 2022
- 2023
- Change
-
Annual gift tax exclusion>Single>2022$16,000 per recipient>2023$17,000 per recipient>Change+$1,000>
-
Married filing jointly>2022$32,000 per recipient>2023$34,000 per recipient>Change+$2,000>
-
Lifetime gift and estate tax exclusion>Single>2022$12.06 million>2023$12.92 million>Change+$860,000>
-
Married filing jointly>2022$24.12 million>2023$25.84 million>Change+$1.72 million>
1Roth IRA income limits are based on modified adjusted gross income, which is a taxpayer's adjusted gross income with certain deductions and income added back in.
2Tax Policy Center, Briefing Book, 2020
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