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Now that this year’s filing season is over, it’s time to start thinking about next year’s taxes.  A little planning now can save you money in the future.  To help you get started, we’ve created a list of tax changes that will affect your tax return when you file in 2023.

The standard deduction

When you do your taxes, you have the option of itemizing or taking the standard deduction.  The standard deduction is a set dollar amount you can deduct from your taxable income, no questions asked.  For tax year 2022, the standard deduction is $12,950 for those who are single or married filing separately, $19,400 for head of household filers and $25,900 for married couples filing jointly.  If your qualified deductions are more than the standard deduction amount, then itemizing makes more sense.  When you do your taxes with ezTaxReturn, we’ll compare both, so you choose the one that saves you the most money.

Income tax brackets

Your tax brackets are used to calculate your federal income taxes.  There are seven tax brackets ranging from 10% to 37%.  As your income increases, it’s taxed at a higher rate.  Every year, the brackets are adjusted to account for inflation.  Here are the income tax brackets for 2022.

Tax rateSingle filersMarried filing jointlyMarried filing separatelyHead of household
10%$0 to $10,275$0 to $20,550$0 to $10,275$0 to $14,650
12%$10,276 to $41,775$20,551 to $83,550$10,276 to $41,775$14,651 to $55,900
22%$41,776 to $89,075$83,551 to $178,150$41,776 to $89,075$55,901 to $89,050
24%$89,076 to $170,050$178,151 to $340,100$89,076 to $170,050$89,051 to $170,050
32%$170,051 to $215,950$340,101 to $431,900$170,051 to $215,950$170,051 to $215,950
35%$215,951 to $539,900$431,901 to $647,850$215,951 to $323,925$215,951 to $539,900
37%$539,901 or more$647,851 or more$323,926 or more$539,901 or more

Retirement accounts

The contribution limit for workers with a 401k, 403b and most 457 plans has increased to $20,500, allowing you to save more for retirement.  Once you hit the big 5-0, you have the option of contributing an extra $6,500 to your account.  If you have a traditional or Roth IRA, the annual contribution limit is $6,000.  If you’re aged 50 or older, the catch-up contribution is $1,000.

HSA contribution limits

An HSA is a special savings account that lets you save money for medical expenses.  There are three benefits of having an HSA, your contributions aren’t subjected to federal taxes, your earnings are tax-free and your withdrawals for qualified medical expenses are also tax-free.  However, you can only contribute to an HSA if you have a High Deductible Health Plan (HDHP).  The minimum deductible is $1,400 for self-only plans and $2,800 for family plans.  If you have an HDHP, you can contribute up to $3,650 for self-only and $7,300 for families into an HSA.  The annual catch-up contribution limit for those 55 or older is $1,000.

Alternative Minimum Tax (AMT)

The Alternative Minimum Tax (AMT) is meant to ensure that taxpayers who earn above a certain level pay their fair share of taxes.  The AMT exemption amount is $75,900 for single filers and $118,100 for married couples filing jointly.  The exemption phases out at 25 cents per dollar once your taxable income reaches $539,900 for single taxpayers and $1,079,800 for married couples filing jointly.

Capital gains tax rates

When you make profit from an investment that you’ve held on to longer than a year, it is subject to long-term capital gains tax.  Here are the 2022 capital gains tax rates.

Capital gains tax rateSingleMarried filing jointlyMarried filing separatelyHead of household
0%$0 to $41,675$0 to $83,350$0 to $41,675$0 to $55,800
15%$41,676 to $459,750$83,351 to $517,200$41,676 to $258,600$55,801 to $488,500
20%$459,751 or more$517,201 or more$258,601 or more$488,501 or more

Gift exclusion

For 2022, the annual gift exclusion is $16,000.  This means you can give $16,000 to as many people as you wish without having to report it to the IRS.