2023 Tax Filing Tips & Considerations

The IRS has announced several adjustments for 2023 that may affect you, including changes to capital gains tax rates, annual exclusion for gifts, estate tax exclusion, contribution limit increases, RMD age changes, and more. Below you will find general tax tips, considerations, and important deadlines dates.

Quick Tips:

• Review Paycheck tax withholdings: If you are consistently receiving a large tax refund or having to pay in, consider adjusting your withholdings.

• Maximize contributions: The IRS increased contributions limits for many retirement accounts; Consult with your tax professional and financial advisor to ensure that you are maximizing your contributions and the types of accounts you are contributing to.

2023 contribution limits for retirement plans are:

IRA/Roth IRA are $6,500 For those over the age of 50 the catch-up contribution remains at $1,000.

401K & 403B is $22,500 For those over the age of 50 the catch-up contributions are $7,500.

Simple IRA contributions limits are $15,500 For those over age 50 the catch-up contributions of $3,500.

• Required Minimum Distributions (RMD): The IRS changed the RMD age requirement to age 73 for 2023 and will increase again to age 75 in 2033. Withdrawals are taxed as ordinary income and, if taken before age 59 ½, may be subject to a 10% federal income tax penalty. Confirm with your financial professional if you are required to take a distribution from a retirement account.

• Maintain Your Tax Records: You should keep tax return records for 3 years unless one of the following applies: you claimed a loss, failed to report income, or don’t file a return. In these cases, you should maintain records for 7+ years and should consult with your tax professional.

Important deadline dates

January 15, 2023 Fourth-quarter estimated tax payments must be postmarked to IRS.

April 18, 2023 Individual tax returns due, or you must file an extension. It’s also the last day to make 2022 IRA/Roth IRA contributions.

If you have questions regarding tax strategies, planning or how these fit into your overall financial picture, a professional can help.

Dan Lowis, LPL is a financial advisor with NAVAR Financial at 1822 Commerce Drive in North Mankato.

This material is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax professional before modifying your tax strategy.

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. NAVAR Financial is not an affiliate company of LPL Financial