With Tax Day approaching, here are eight things to keep in mind as you prepare to file your 2023 taxes.

“It’s a great time to reassess your tax planning for 2023. An important part of this process is to know the likely tax bracket you’ll be in, the limits that could impact you, and the potential deductions available,” said Chris Scoggin, CPA, Director of CS CPA Group.

Here are eight things to keep in mind as you prepare to file your 2023 taxes.

  1. Income tax brackets shifted a bit

There are still seven tax rates, but the income ranges (tax brackets) for each rate have shifted slightly to account for inflation. For 2023, the following rates and income ranges apply:

Taxable income brackets

Tax rate Single filers                       Married filing jointly

10%      $0 to $11,000                 $0 to $22,000

12%      $11,001 to $41,725       $20,001 to $89,450

22%      $44,726 to $95,375       $89,451 to $190,750

24%      $95,376 to $182,100    $190,751 to $364,200

32%      $182,101 to $231,250  $364,201 to $462,500

35%      $231,251 to $578,125  $462,501 to $693,750

37%      $578,126 or more          $693,751 or more

  1. The standard deduction increased slightly

After an inflation adjustment, the 2023 standard deduction increases to $13,850 for single filers and married couples filing separately and to $20,800 for single heads of household, who are generally unmarried with one or more dependents. For married couples filing jointly, the standard deduction rises to $27,700.

  1. Itemized deductions remain mostly the same

For most filers, taking the higher standard deduction is more practical and saves the hassle of keeping track of receipts. But if you have enough tax-deductible expenses, you might benefit from itemizing.

The following rules for itemized deductions haven’t changed much for 2023, but they’re still worth pointing out.

State and local taxes: The deduction for state and local income taxes, property taxes, and real estate taxes is capped at $10,000.

Mortgage interest deduction: The mortgage interest deduction is limited to $750,000 of indebtedness. But people who had $1,000,000 of home mortgage debt before December 16, 2017, will still be able to deduct the interest on that loan.

Medical expenses: Only medical expenses that exceed 7.5% of adjusted gross income (AGI) can be deducted in 2023.

Charitable donations: In 2023, the annual income tax deduction limits for gifts to public charities1 are 30% of AGI for contributions of non-cash assets—if held for more than one year—and 60% of AGI for contributions of cash. If you give both can and non-cash assets, the overall limit is generally 50% of AGI.

Miscellaneous deductions: No miscellaneous itemized deductions are allowed.

  1. IRA and 401(k) limits are slightly higher

The traditional IRA and Roth contribution limits in 2023 increased slightly from 2022. Individuals can contribute up to $6,500 to an IRA, and those age 50 and older also qualify to make an additional $1,000 catch-up contribution. In addition, the 2023 contribution limits for tax-deferred 401(k)s and Roth 401(k)s have increased to $22,500. If you’re age 50 or older, you qualify to make an additional $7,500 catch-up contribution for this tax year as well.

If you’re able to, consider maxing out your contributions to these accounts. Doing so can provide a huge boost to your retirement saves and potentially provide a tax deduction.

  1. You can save a bit more in your health savings account (HSA)

For 2023, the maximum you can contribute to an HSA is $3,850 for an individual (up $50 from 2021) and $7,750 for a family (up $100). People 55 and older can contribute an extra $1,000 catch-up contribution.

To be eligible for an HSA, you must be enrolled in a high-deductible health plan (which usually has lower premiums as well). Learn more about the benefits of an HSA.

  1. The Child Tax Credit could give you a tax break

Tax credits, which reduce the tax you owe dollar for dollar, are normally better than deductions, which reduce how much of your income is subject to tax. In 2023, the Child Tax Credit is $2,000 per child under age 17. The credit is also subject to a phase-out starting at $400,000 for joint filers and $200,000 for single filers. For other qualified dependents, you can claim a $500 credit.

  1. The alternative minimum tax (AMT) exemption is higher

Until the AMT exemption enacted by the Tax Cuts and Jobs Act expires in 2025, the AMT will continue to affect mostly households with incomes over $500,000. For 2023, the AMT exemptions are $81,300 for single filers and $126,500 for married taxpayers filing jointly. The phase-out thresholds are $1,156,300 for married taxpayers filing a joint return and $578,150 for all other taxpayers. (Once your income for the AMT hits the phase-out threshold, your AMT exemption begins to phase out at 25 cents for every dollar over the threshold.)

  1. The estate tax exemption is even higher

The estate and gift tax exemption, which is indexed to inflation, rose to $12,920,000 for 2023. But the now-higher exemption is set to expire at the end of 2025, meaning it could be essentially cut in half at that time if Congress doesn’t act.

The annual gift exclusion, which allows you to give money to your loved ones each year without incurring any tax liability or using up any of your lifetime estate and gift tax exemption, increases to $17,000 per recipient (up $1,000 from 2022).

All of us at CS CPA Group are happy to discuss these changes or any questions you may have regarding your 2023 taxes.