Kingsguard Capital Addresses New Changes to Taxes in Retirement for 2023

GLEN ALLEN, Va., Jan. 26, 2023 /PRNewswire/ -- According to Jessica Cervinka, president of Kingsguard Capital, clients anticipating their taxes in 2023 may be in for some good news. There are several changes to be aware of that could have a significant impact on retirement planning. Here are seven important points to keep in mind:

1. The Jobs Act of 2017, which is set to expire on December 31, 2026, has increased the amount of standard deduction available. This is significant, as 90% of Americans use the standard deduction method rather than itemizing their deductions. In 2023, the standard deduction for singles will be $13,850 and for married couples filing jointly, it will be $27,700.
2. The tax brackets have also expanded to take into account inflation and rising wages. There will still be seven brackets, with the highest one being 37%. Each tax bracket provides a bit more flexibility, which can be a welcome relief.
3. The gift tax limits and estate tax exclusion limits have also increased. The gift tax limit has been raised to $17,000 per individual, and a married couple can gift up to $17,000 each to an individual for a total of $34,000. The estate tax exclusion limits for 2023 have risen to $12,900,000 for single individuals and $25,840,000 for married couples. Estates under these thresholds will not be subject to federal estate taxes.
4. The contribution limits for employer plans such as 401(k)s, 403(b)s, 457s, and TSPs have also increased for 2023. Employees can now defer up to $22,500, and those over 50 can use the "catch-up" rule to defer an additional $7,500 for a total of $30,000.
5. The contribution limits for IRAs and Roth IRAs have also increased for 2023. Individuals can contribute $6,500 and those over 50 can contribute $7,500.
6. The Secure Act 2.0 has also passed into law, bringing further changes to the required minimum distribution (RMD) rules. Under the Secure Act of 2019, individuals who reached age 70½ after January 1, 2020, were able to delay taking their RMD until age 72 and avoid the 50% penalty. In 2023, the age for RMDs will be 73, and the penalty has been reduced to 25%. The Secure Act will also increase the RMD age to 75 in 2033.
7. Beginning in 2023, individuals over the age of 70½ will also have the option to make one-time gifts of up to $50,000 (adjusted for inflation) to charitable remainder unitrusts, charitable gift annuities, or qualified charities as part of their qualified charitable distribution (QCD) limit.

It is important to work with a financial advisor and tax professional to keep up with the constant changes in tax regulations and to identify and implement the best strategies customized for you. As part of a sound retirement plan, staying informed and taking advantage of any available opportunities can make a significant difference. Happy New Year!

Advisory services are offered through Kingsguard Capital LLC, a Registered Investment Adviser in the state of Virginia & Florida. Insurance products and services are offered through Reliant Retirement Corp DBA Safegrowth Financial LLC, an affiliated company. Kingsguard Capital is a Registered Investment Adviser firm CRD# 296945.

Media contact:
Sal Velazquez
[email protected]
(800) 849-1085

SOURCE Kingsguard Capital