401k Contribution Limits for 2023
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan has increased. You can contribute $22,500 in 2023.
The limit on annual contributions to an IRA increased to $6,500. The IRA catch up contribution limit for individuals aged 50 and over is not subject to an annual cost of living adjustment and remains $1,000.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan has increased to $7,500, up from $6,500. Therefore, participants in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan who are 50 and older can contribute up to $30,000, starting in 2023. The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans is increased to $3,500, up from $3,000.
Game Changer
Abare, Kresge & Associates CPAsis a full-service accounting firm that specializes in working with all financial aspects of small to medium sized businesses. The founder, Ken Kresge, first hung his shingle in St. Augustine in 1989 and since
then has been a beacon of financial guidance in the community. In 2000, Bill Abare joined Ken Kresge and together have provided our community with optimal financial services for the past 22 years. Collectively, the firm has over 125 years of CPA experience...
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Local Experts
HELP FOR YOUR NEW ROLE AS A FIDUCIARY TAX PLANNING IN A COMPLEX CLIMATE
If you've been named a fiduciary, you may have found yourself suddenly put in charge of a stack of statements and legal documents but with no idea
what to do with it or where to start. It can be overwhelming to be responsible for another's assets and to have to work with family
and friends to see that those assets are managed and ultimately distributed in accordance with the wishes of the deceased person. There are
a lot of questions that could be going through your mind – "do I need to engage an attorney," "how do I access funds to pay final expenses,"
etc. The good news is, you don't have to feel bewildered or handle the process all by yourself...
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Bonus Depreciation
The end of the year is approaching, and you may be looking for ways to lower your taxes. If you have business income, you may be able to lower it by purchasing equipment and/or an SUV, pickup, or van. The IRS allows 100% bonus depreciation on equipment and �heavy� vehicles used more than 50% for business. To qualify as a �heavy� vehicle, an SUV, pickup, or van must have a manufacturer�s gross vehicle weight rating (GVWR) above 6,000 pounds. This means that you will be able to expense the entire amount paid.
The depreciation deduction is not as generous for passenger automobiles, which includes light SUVs, pickups, and vans. These also need to be used more than 50% for business. The depreciation limits for these are:
- $10,100 for the first year ($18,100 with bonus depreciation)
- $16,100 for the second year
- $9,700 for the third year, and
- $5,760 for each succeeding year.
As many of you have been reading, the IRS and federal government have released initial information regarding available sick and childcare credits. These credits may have an impact on your business or
personal financial standing. We have been carefully monitoring the latest releases from the IRS in an effort to best advise our clients. As it stands, we can share the following key takeaways from the
most recent IRS releases that we believe will be beneficial in navigating through this troubling time of the COVID-19 pandemic. We will continue to update you as more information becomes available.
Paid Sick Leave Credit
Eligibility: Employee who is under Coronavirus quarantine or self-quarantine or has Coronavirus symptoms
Terms: Employers may receive refundable credit against their payroll tax, social security and Medicare liability owed to the IRS
Amount: Employee's regular rate of pay, up to $511 per day for up to 10 days
Note: If amount of credit exceeds payroll tax liability, the employer would file a request for an accelerated credit for the remaining balance.
Note: Equivalent credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return
and will reduce estimated tax payments.
Child Care Leave Credit
Eligibility: Employees who is caring for family members in quarantine or caring for child whose school/childcare facility is closed due to COVID-19
Terms: Employers may receive refundable credit against their payroll tax, social security and Medicare liability owed to the IRS
Amount: Two-thirds of the employee's regular pay, capped at $200 per day for up to 10 weeks
Exemption: Small businesses with less than 50 employees will be eligible for an exemption for Child Care Credit
Note: Equivalent credit amounts are available to self-employed individuals under similar circumstances. These
credits will be claimed on their income tax return and will reduce estimated tax payments.
No Audits for loans under $2 million!
The Treasury announced May 13th, that recipients of the loans under $2 million will not be subject to audit and it will be automatically determined that the borrower has acted in good faith
in certifying the necessity of the loan. Prior to this announcement, there was much uncertainty among small businesses on whether they could certify that they actually needed this loan. This
should alleviate the fear of 99% of all applicants.
HSA
Amounts have increased to $3,500 for Individuals / $7000 for Families. Maximum catch-up contributions for people over age 55 remain at $1,000.
Divorce
Did you go through a divorce this year or are you currently going through a divorce? The tax rules have changed. Give us a call to discuss the changes to treatment of Alimony! 904-460-0747