2023 Tax Brackets and Contribution Limits

March 9, 2023
Inflation prompted many changes to tax brackets and contribution limits. Here's a look at the most significant.

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

A person who earned less than $138,000 ($218,000 if married) can make the maximum Roth IRA contribution; $138,000–$153,000 ($218,000–$228,000 if married), a reduced contribution; and $153,000 or more ($228,000 or more if married), no contribution

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).

For 2023 tax filings, the standard deduction is $13,850 (up $900) if single and $27,700 (up $1,800) if married.
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.

2023 tax brackets for individuals: 10%: <$11,000); 12%: $11,000–$44,750; 22%: $44,750–$95,375; 24%: $95,375–$182,100; 32%: $182,100–$231,250; 35%: $231,250–$578,125; 37%: ≥$578,125. Joint filers: 10%: <$22,000; 12%: $22,000–$89,450; 22%: $89,450–$190,750); 24%: $190,750–$364,000; 32%: $364,000–$462,500; 35%: $462,500–$693,750; 37%: ≥$693,750.

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.

For 2023, the long-term capital gains tax brackets are: 0%: <$44,625 (<$89,250 if married); 15%: $44,625–$492,300 ($89,250–$553,850 if married); and 20%: $492,300 and above ($553,850 and above if married).

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

This information does not constitute and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner, or investment manager.

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Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

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