We maintain two detailed resources for the purposes of tax planning.  For 2023 the numbers have been increased with inflation per usual (yawn...).  Yeah this is pretty boring stuff however it could be worth thousands...  You might want to check if your income puts you on a bubble where a tax credit that is valuable to you phases out, or a tax hike phases in.  One strategy for keeping yourself on the right side of the bubble is to contribute to a retirement plan which lowers taxable income.  Self employed individuals can rack up more expenses or delay invoices to achieve the same effect. Note that all this needs to happen before the end of the calendar year. There are some exceptions for self employed retirement account contributions though.

Figures updated for the 2023 tax year:

• List of IRS Income Triggers
  • New taxes kick it at certain income levels.
  • Some credits start to go away or disappear completely if income is too high.
     
• Calculating MAGI for Various Tax Credits and Deductions
  • Income is a nebulous concept when it comes to taxes in the US.
  • MAGI stands for Modified Adjusted Gross Income, and it is calculated slightly differently (even perversely) depending on the tax program / credit being considered. 
     

Summary of IRS Tax Changes for the 2023 tax year:

• Federal Poverty Level household income levels increased slightly:
  • This is important because it factors into the ACA tax credits for health insurance and the associated premium tax credits.
  • See the official Federal Poverty Levels table published by the US Department of Health and Human Services.
     
• Traditional IRA and Roth IRA contribution limits increased:
  • $6,500 or $7,500 for people over age 50.
     
• Traditional IRA income limits increased:
  • Single Filers - phase out starts at $73,000
  • Married Filing Jointly - phase out starts at $218,000
     
• Roth IRA income limits increased:
  • Single Filers - phase out starts at $138,000
  • Married Filing Jointly - phase out starts at $218,000
     
• American opportunity tax credit (AOTC) income limits increased:
  • Single Filers - phase out starts at $80,000
  • Married Filing Jointly - phase out starts at $160,000
  • Amount of $2,500 stayed the same
     
• Lifetime Learning Credit (LLC) income limits increased:
  • Single Filers - phase out starts at $80,000
  • Married Filing Jointly - phase out starts at $160,000
  • Amount of $2,000 stayed the same
     
• Student Loan Interest Deduction income limits increased:
  • Single Filers - phase out starts at $75,000
  • Married Filing Jointly - phase out starts at $155,000
  • Maximum deduction of $2,500 stayed the same
     
• Medicare Premiums and the Income Related Monthly Adjustment Amount (IRMMA):
  • 2023 standard premium is $164.90
  • Single Filers - phase in starts at $97,000
  • Married Filing Jointly - phase in starts at $194,000
     
• Child Tax Credit - drops back to pre-pandemic levels :(
  • $2,000 per child under the age of 17 on Dec 31st
  • Single Filers - phase out starts at $200,000
  • Married Filing Jointly - phase out starts at $400,000
     
• Long Term Capital Gains income thresholds increased for inflation:
  • Single filers:
    • 0% - less than $44,625
    • 15% - $44,625 - $492,300
    • 20% - $492,300 and higher
  • Married filing jointly:
    • 0% - less than $89,250
    • 15% - $89,250 - $553,850
    • 20% - $553,850 and higher
       
• Saver’s Credit income thresholds increased:
  • Single filers:
    • 50% of contribution - not more than $21,750
    • 20% of contribution - $21,751 - $23,750
    • 10% of contribution - $23,750 - $36,500
  • Married filing jointly:
    • 50% of contribution - not more than $43,500
    • 20% of contribution - $43,501 - $47,500
    • 10% of contribution - $47,501 - $73,000