Important Contribution Limits for 2023

[kgtest]

I wanted to start a thread that is similar to the Important 2023 Trigger Income Limits linked here, but for Important 2023 Contribution limits.

The Social Security OSADI Contribution and Benefit base for 2023 is being raised from ($147,000 in 2022) to $160,200 in 2023.
See: https://www.ssa.gov/oact/cola/cbbdet.html This is essentially 2023 social security earnings limits cutoff. SO after $160,200 any additional earnings will not be counted towards the social security credit system. This is helpful for folks who are self employed and also define there own "reasonable" salaries for the year. It might not make sense to pay yourself more than $160,200 in 2023 since that is the cutoff for SS contribution benefits.


IRA Contribution Limits: $6,500 ($7,500 if you're age 50 or older)

401(k), 403(b), most 457 plans, and TSP Contribution Limits: $22,500 ($30,000 if you're age 50 or older)


Tax Deductibility of IRA Contributions (Tax Year 2023)


Roth IRA Contribution Limits (Tax Year 2023)



Some OTHER important solo entrepreneur contribution limits for 2023:

Solo 401k Employee Contribution Limit: $22,500 ($30,000 if you're age 50 or older)
Solo 401k Employer nonelective contributions: *Up to 25% of compensation not to exceed $66,000 ($73,500 if you're age 50 or older)

SEP Contribution Limits (including grandfathered SARSEPs: *Up to 25% of compensation not to exceed $66,000 ($69,500 if you're age 50 or older)

Custodial (Child) Roth IRA: $6,500 per child, per year. Contributions cannot exceed child's annual earned income.

*An Owner of a business can essentially claim a salary of up to $263,950.00 to retain the maximum contribution limit for Solo/SEP nonelective contributions of $66,000 - $22,500 for a total of $43,500 (employer) contributions.

As an example for me under age 50, I can put in $6,500 into Solo Roth 401k, $16,000 into my Solo 401k, and $43,500 as an Employer into the nonelective contributions. To sweeten then deal, I can also put in $6,500 into my Individual Roth IRA.

 

[Koolau]

^^^^^^

It's been 17 years since I retired and I can't even relate to the "large" numbers you list in your Contribution Limits. I always struggled just to put in the max for 401(k) back then. I know some folks (here and elsewhere) make those contributions each year - and more power to them. At some point, though, you also have to eat!

I guess I'm still adjusting to the inflation that has taken place since I left megacorp.

Thanks for your efforts on this list.

 

[audreyh1]

2023 HSA contribution limits

The HSA contribution limits for 2023 is $3,850 for self-only coverage and $7,750 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.

 

[kgtest]

2023 HSA contribution limits

The HSA contribution limits for 2023 is $3,850 for self-only coverage and $7,750 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.

Thanks Audrey, I knew I was missing something! Anyone else feel free to add to this list!

@Koolau I hear ya! At 40, we maxed both of our 401ks, Roth IRAs and HSA and also hit the max salary for Social Security credits last year for the first time ever. We probably could have done it in 2020 as well but spent a bunch of money on a deck/patio remodel.

I hear ya, a guy's gotta eat. I would say, if you max these things every year you will have absolutely no issues retiring early lol.

 

[audreyh1]

Back when I was able to contribute to an IRA it was a lousy $2000 per person limit. Had been stuck at that level forever.
I was limited at the company 401k due to being higher compensated employee and for a few years I made the $2000 after tax contribution to my IRA until I no longer had earned income.

 

[FiveDriver]

I was wondering about Charitable Contributions for 2022, and thought this might be a good thread to ask......

Where would any Contributions be deducted on a simple MFJ Tax Return??

 

[audreyh1]

I was wondering about Charitable Contributions for 2022, and thought this might be a good thread to ask......

Where would any Contributions be deducted on a simple MFJ Tax Return??

No where on a simple one.

You have to file Schedule A for deductions and unless your charitable contributions plus other deductions you can claim are higher than your standard deduction, there is no point in filing schedule A.

2023 standard deduction for MFJ is $27,700.
For 2022 it was $25,900

If either or both of you is over 65 there is an additional small amount added to your standard deduction. Looks like that was $1400 per person in 2022.

 

[FiveDriver]

That's where I suspected the CC went. Oh well, we have a few local charities that we support and will continue even without the deduction.

 

[FloridaWizard]

I was wondering about Charitable Contributions for 2022, and thought this might be a good thread to ask......

Where would any Contributions be deducted on a simple MFJ Tax Return??

For 2021 you were allowed to take the standard deduction AND and charitable contribution deduction (lines 12a and 12b). For 2022 it appears the latter is gone.

 

[Samsung4321]

Important 2023 Contribution limits.

Aus $A contributions to superannuation funds:

• 27,500 / y before tax, concessional.
• 110,000 / y after tax, non-concessional,
  • 1,700,000 total non-concessional cap.

https://www.ato.gov.au/super/self-managed-super-funds/contributions-and-rollovers/contribution-caps/

 

[Surewhitey]

^^^^^^

It's been 17 years since I retired and I can't even relate to the "large" numbers you list in your Contribution Limits. I always struggled just to put in the max for 401(k) back then. I know some folks (here and elsewhere) make those contributions each year - and more power to them. At some point, though, you also have to eat!

I guess I'm still adjusting to the inflation that has taken place since I left megacorp.

Thanks for your efforts on this list.

This has boosted our situation as we maxed out both 401ks since early 2000s. Then 5 years ago I started coasting by starting a small biz and now over 50, I'm maxing + catch up + SEP401K (20% of profit) to defer the 24% fed... Between that and DW's 401k + catch up + HSA + RSUs, we're stashing a pretty penny.