Effective: February 7, 2022
Your Stuff & Your Permissions
When you use our Services, you provide us with things like your files, content, messages, contacts, and so on ("Your Stuff"). Your Stuff is yours. These Terms don’t give us any rights to Your Stuff except for the limited rights that enable us to offer the Services.
We need your permission to do things like hosting Your Stuff, backing it up, and sharing it when you ask us to. Our Services also provide you with features like eSign, file sharing, email newsletters, appointment setting and more. These and other features may require our systems to access, store, and scan Your Stuff. You give us permission to do those things, and this permission extends to our affiliates and trusted third parties we work with.
Sharing Your Stuff
Our Services let you share Your Stuff with others, so please think carefully about what you share.
You’re responsible for your conduct. Your Stuff and you must comply with applicable laws. Content in the Services may be protected by others’ intellectual property rights. Please don’t copy, upload, download, or share content unless you have the right to do so. We may review your conduct and content for compliance with these Terms. With that said, we have no obligation to do so. We aren’t responsible for the content people post and share via the Services.
Help us keep you informed and Your Stuff protected. Safeguard your password to the Services, and keep your account information current. Don’t share your account credentials or give others access to your account.
You may use our Services only as permitted by applicable law, including export control laws and regulations. Finally, to use our Services, you must be at least 13, or in some cases, even older. If you live in France, Germany, or the Netherlands, you must be at least 16. Please check your local law for the age of digital consent. If you don’t meet these age requirements, you may not use the Services.
Some of our Services allow you to download client software (“Software”) which may update automatically. So long as you comply with these Terms, we give you a limited, nonexclusive, nontransferable, revocable license to use the Software, solely to access the Services. To the extent any component of the Software may be offered under an open source license, we’ll make that license available to you and the provisions of that license may expressly override some of these Terms. Unless the following restrictions are prohibited by law, you agree not to reverse engineer or decompile the Services, attempt to do so, or assist anyone in doing so.
We sometimes release products and features that we are still testing and evaluating. Those Services have been marked beta, preview, early access, or evaluation (or with words or phrases with similar meanings) and may not be as reliable as other non-beta services, so please keep that in mind.
The Services are protected by copyright, trademark, and other US and foreign laws. These Terms don’t grant you any right, title, or interest in the Services, others’ content in the Services, CountingWorks and our trademarks, logos and other brand features. We welcome feedback, but note that we may use comments or suggestions without any obligation to you.
We respect the intellectual property of others and ask that you do too. We respond to notices of alleged copyright infringement if they comply with the law, and such notices should be reported to legal@CountingWorks.com. We reserve the right to delete or disable content alleged to be infringing and terminate accounts of repeat infringers. Our designated agent for notice of alleged copyright infringement on the Services is:
You’re free to stop using our Services at any time. We reserve the right to suspend or terminate your access to the Services with notice to you if:
We won’t provide notice before termination where:
Discontinuation of Services
We may decide to discontinue the Services in response to unforeseen circumstances beyond CountingWorks control or to comply with a legal requirement. If we do so, we’ll give you reasonable prior notice so that you can export Your Stuff from our systems.
Services “AS IS”
We strive to provide great Services, but there are certain things that we can't guarantee. TO THE FULLEST EXTENT PERMITTED BY LAW, CountingWorks AND ITS AFFILIATES, SUPPLIERS AND DISTRIBUTORS MAKE NO WARRANTIES, EITHER EXPRESS OR IMPLIED, ABOUT THE SERVICES. THE SERVICES ARE PROVIDED "AS IS." WE ALSO DISCLAIM ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. Some places don’t allow the disclaimers in this paragraph, so they may not apply to you.
Limitation of Liability
WE DON’T EXCLUDE OR LIMIT OUR LIABILITY TO YOU WHERE IT WOULD BE ILLEGAL TO DO SO—THIS INCLUDES ANY LIABILITY FOR CountingWorks OR ITS AFFILIATES’ FRAUD OR FRAUDULENT MISREPRESENTATION IN PROVIDING THE SERVICES. IN COUNTRIES WHERE THE FOLLOWING TYPES OF EXCLUSIONS AREN’T ALLOWED, WE'RE RESPONSIBLE TO YOU ONLY FOR LOSSES AND DAMAGES THAT ARE A REASONABLY FORESEEABLE RESULT OF OUR FAILURE TO USE REASONABLE CARE AND SKILL OR OUR BREACH OF OUR CONTRACT WITH YOU. THIS PARAGRAPH DOESN’T AFFECT CONSUMER RIGHTS THAT CAN'T BE WAIVED OR LIMITED BY ANY CONTRACT OR AGREEMENT.
IN COUNTRIES WHERE EXCLUSIONS OR LIMITATIONS OF LIABILITY ARE ALLOWED, CountingWorks, ITS AFFILIATES, SUPPLIERS OR DISTRIBUTORS WON’T BE LIABLE FOR:
THESE EXCLUSIONS OR LIMITATIONS WILL APPLY REGARDLESS OF WHETHER OR NOT CountingWorks OR ANY OF ITS AFFILIATES HAS BEEN WARNED OF THE POSSIBILITY OF SUCH DAMAGES.
IF YOU USE THE SERVICES FOR ANY COMMERCIAL, BUSINESS, OR RE-SALE PURPOSE, CountingWorks, ITS AFFILIATES, SUPPLIERS OR DISTRIBUTORS WILL HAVE NO LIABILITY TO YOU FOR ANY LOSS OF PROFIT, LOSS OF BUSINESS, BUSINESS INTERRUPTION, OR LOSS OF BUSINESS OPPORTUNITY. CountingWorks AND ITS AFFILIATES AREN’T RESPONSIBLE FOR THE CONDUCT, WHETHER ONLINE OR OFFLINE, OF ANY USER OF THE SERVICES.
Let’s Try To Sort Things Out First. We want to address your concerns without needing a formal legal case. Before filing a claim against CountingWorks or our affiliates, you agree to try to resolve the dispute informally by contacting legal@CountingWorks.com. We’ll try to resolve the dispute informally by contacting you via email.
Judicial forum for disputes. You and CountingWorks agree that any judicial proceeding to resolve claims relating to these Terms or the Services will be brought in the federal or state courts of Orange County, California, subject to the mandatory arbitration provisions below. Both you and CountingWorks consent to venue and personal jurisdiction in such courts. If you reside in a country (for example, European Union member states) with laws that give consumers the right to bring disputes in their local courts, this paragraph doesn’t affect those requirements.
IF YOU’RE A U.S. RESIDENT, YOU ALSO AGREE TO THE FOLLOWING MANDATORY ARBITRATION PROVISIONS:
These Terms will be governed by California law except for its conflicts of laws principles. However, some countries (including those in the European Union) have laws that require agreements to be governed by the local laws of the consumer's country. This paragraph doesn’t override those laws.
These Terms constitute the entire agreement between you and CountingWorks with respect to the subject matter of these Terms, and supersede and replace any other prior or contemporaneous agreements, or terms and conditions applicable to the subject matter of these Terms. These Terms create no third party beneficiary rights.
Waiver, Severability & Assignment
CountingWorks failure to enforce a provision is not a waiver of its right to do so later. If a provision is found unenforceable, the remaining provisions of the Terms will remain in full effect and an enforceable term will be substituted reflecting our intent as closely as possible. You may not assign any of your rights under these Terms, and any such attempt will be void. CountingWorks may assign its rights to any of its affiliates or subsidiaries, or to any successor in interest of any business associated with the Services.
We may revise these Terms from time to time to better reflect:
If an update affects your use of the Services or your legal rights as a user of our Services, we’ll notify you prior to the update's effective date by sending an email to the email address associated with your account or via an in-product notification. These updated terms will be effective no less than 30 days from when we notify you.
If you don’t agree to the updates we make, please cancel your account before they become effective. By continuing to use or access the Services after the updates come into effect, you agree to be bound by the revised Terms.
Effective: February 7, 2022
Thanks for visiting our website. Our mission is to create a web based experience that makes it easier for us to work together. Here we describe how we collect, use, and handle your personal information when you use our websites, software, and services (“Services”).
What & Why
We collect and use the following information to provide, improve, and protect our Services:
Account information. We collect, and associate with your account, the information you provide to us when you do things such as sign up for your account, opt-in to our client newsletter or request an appointment (like your name, email address, phone number, and physical address). Some of our Services let you access your accounts and your information via other service providers.
Your Stuff. Our Services are designed to make it simple for you to store your files, documents, comments, messages, and so on (“Your Stuff”), collaborate with others, and work across multiple devices. To make that possible, we store, process, and transmit Your Stuff as well as information related to it. This related information includes your profile information that makes it easier to collaborate and share Your Stuff with others, as well as things like the size of the file, the time it was uploaded, collaborators, and usage activity. Our Services provide you with different options for sharing Your Stuff.
Contacts. You may choose to give us access to your contacts (spouse or other company staff) to make it easy for you to do things like share and collaborate on Your Stuff, send messages, and invite others to use the Services. If you do, we’ll store those contacts on our servers for you to use.
Usage information. We collect information related to how you use the Services, including actions you take in your account (like sharing, viewing, and moving files or folders). We use this information to improve our Services, develop new services and features, and protect our users.
Cookies and other technologies. We use technologies like cookies to provide, improve, protect, and promote our Services. For example, cookies help us with things like remembering your username for your next visit, understanding how you are interacting with our Services, and improving them based on that information. You can set your browser to not accept cookies, but this may limit your ability to use the Services.
Marketing. We give users the option to use some of our Services free of charge. These free Services are made possible by the fact that some users upgrade to one of our paid Services. If you register for our free Services, we will, from time to time, send you information about the firm or tax and accounting tips when permissible. Users who receive these marketing materials can opt out at any time. If you do not want to receive marketing materials from us, simply click the ‘unsubscribe’ link in any email.
We sometimes contact people who do not have an account. For recipients in the EU, we or a third party will obtain consent before contacting you. If you receive an email and no longer wish to be contacted by us, you can unsubscribe and remove yourself from our contact list via the message itself.
Bases for processing your data. We collect and use the personal data described above in order to provide you with the Services in a reliable and secure manner. We also collect and use personal data for our legitimate business needs. To the extent we process your personal data for other purposes, we ask for your consent in advance or require that our partners obtain such consent.
We may share information as discussed below, but we won’t sell it to advertisers or other third parties.
Other users. Our Services display information like your name, profile picture, device, and email address to other users in places like your user profile and sharing notifications. You can also share Your Stuff with other users if you choose. When you register your account with an email address on a domain owned by your employer or organization, we may help collaborators and administrators find you and your workspace by making some of your basic information—like your name, workspace name, profile picture, and email address—visible to other users on the same domain. This helps you sync up with workspaces you can join and helps other users share files and folders with you. Certain features let you make additional information available to others.
Workspace Admins. If you are a user of a workspace, your administrator may have the ability to access and control your workspace account. Please refer to your organization’s internal policies if you have questions about this. If you are not a workspace user but interact with a workspace user (by, for example, joining a shared folder or accessing stuff shared by that user), members of that organization may be able to view the name, email address, profile picture, and IP address that was associated with your account at the time of that interaction.
Law & Order and the Public Interest. We may disclose your information to third parties if we determine that such disclosure is reasonably necessary to: (a) comply with any applicable law, regulation, legal process, or appropriate government request; (b) protect any person from death or serious bodily injury; (c) prevent fraud or abuse of our platform or our users; (d) protect our rights, property, safety, or interest; or (e) perform a task carried out in the public interest.
Stewardship of your data is critical to us and a responsibility that we embrace. We believe that your data should receive the same legal protections regardless of whether it’s stored on our Services or on your home computer’s hard drive. We’ll abide by Government Request Policies when receiving, scrutinizing, and responding to government requests (including national security requests) for your data:
Security. We have a team dedicated to keeping your information secure and testing for vulnerabilities. We also continue to work on features to keep your information safe in addition to things like blocking repeated login attempts, encryption of files at rest, and alerts when new devices and apps are linked to your account. We deploy automated technologies to detect abusive behavior and content that may harm our Services, you, or other users.
User Controls. You can access, amend, download, and delete your personal information by logging into your account.
Retention. When you sign up for an account with us, we’ll retain information you store on our Services for as long as your account is in existence or as long as we need it to provide you the Services. If you delete your account, we will initiate deletion of this information after 30 days. But please note: (1) there might be some latency in deleting this information from our servers and back-up storage; and (2) we may retain this information if necessary to comply with our legal obligations, resolve disputes, or enforce our agreements.
Around the world. To provide you with the Services, we may store, process, and transmit information in the United States and locations around the world—including those outside your country. Information may also be stored locally on the devices you use to access the Services.
EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield. When transferring data from the European Union, the European Economic Area, and Switzerland, We rely upon a variety of legal mechanisms, including contracts with our customers and affiliates. We comply with the EU-U.S. and Swiss–U.S. Privacy Shield Frameworks as set forth by the U.S. Department of Commerce regarding the collection, use, and retention of personal information transferred from the European Union, the European Economic Area, and Switzerland to the United States.
We are subject to oversight by the U.S. Federal Trade Commission. JAMS is the US-based independent organization responsible for reviewing and resolving complaints about our Privacy Shield compliance—free of charge to you. We ask that you first submit any such complaints directly to us via privacy@CountingWorks.com. If you aren’t satisfied with our response, please contact JAMS at https://www.jamsadr.com/eu-us-privacy-shield. In the event your concern still isn’t addressed by JAMS, you may be entitled to a binding arbitration under Privacy Shield and its principles.
If we are involved in a reorganization, merger, acquisition, or sale of our assets, your information may be transferred as part of that deal.
Your Right to Control and Access Your Information
You have control over your personal information and how it is collected, used, and shared. For example, you have a right to:
Your personal information is controlled by CountingWorks, Inc. Have questions or concerns about CountingWorks, our Services, and privacy? Contact our Data Protection Officer at privacy@CountingWorks.com. If they can’t answer your question, you have the right to contact your local data protection supervisory authority.
Third Party Vendors
Amazon Web Services
Updated: June 2020.
strives to ensure that its services are accessible to people with disabilities. has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows us to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
Enabling the Accessibility Menu
The accessibility menu can be enabled either by hitting the tab key when the page first loads or by clicking the accessibility menu icon that appears on the corner of the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
In an ongoing effort to continually improve and remediate accessibility issues, we also regularly scan with UserWay's Accessibility Scanner to identify and fix every possible accessibility barrier on our site. Despite our efforts to make all pages and content on fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
Here For You
If you are experiencing difficulty with any content on or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact customer support.
Home Backup Electric Storage Battery Credit
Home Energy Improvement Credit
Clean Energy Vehicles (New and Used) Credits
Standard Deduction Increase
Increased Retirement Plan Contributions
Other Tax-Related Inflation Adjustments
With the holiday celebrations coming to an end, now is the time to take a look at the changes that will impact your 2023 tax return when you file it in 2024.
Keeping up with the constantly changing tax laws can help you get the most benefit out of the laws and minimize your taxes. Many tax parameters, such as the standard deduction, contributions to retirement plans, and tax rates, are annually inflation adjusted, while some tax changes are delayed and take effect in future years. On top of all that, we have Congress considering the retroactive extension of some tax provisions that expired after 2021 or will expire at the end of 2022, as well as proposing new tax legislation. Here are some changes that might affect your 2023 tax return:
Solar Credit Gets New Life – The solar credit is a percentage of the cost of a solar electric system installed on a taxpayer’s first or second residence located in the U.S. Before the passage of the Inflation Reduction Act the solar credit was being phased out by slowly reducing the credit percentage from 30% to 22% over several years, and the credit was scheduled to end after 2023. The Inflation Reduction Act give the credit new life by extending the credit through 2032 at 30% before phasing it out in years 2033 and 2034.
Here are some of the issues about the credit you need to be aware of:
Non-Refundable Credit - The credit is nonrefundable, meaning it can only reduce your tax liability to zero. However, the portion of credit that is not allowed because of this limitation may be carried to the next tax year and added to the credit allowable for that year.
Maximum Credit – There is no specific maximum, however, and since it is not a refundable credit, the benefit may be spread over several years, and if not utilized by the time the credit is phased out, you may not get the benefit of the entire credit.
Qualifying Property – Both a taxpayer’s main and secondary residence qualify for this credit.
Who Gets the Credit? – It may come as a surprise, but you need not own the residence where the solar property is installed to qualify for the credit; you need only be a “resident” of the home. The tax code does not specify that an individual must own the home, only that it is their residence.
When is the Credit Available? – The credit may be claimed on the tax return of the year during which the installation is completed.
Leased Installations – When a solar installation is leased, the lessor gets the credit, not the home’s resident.
As you can see, there is a lot to consider, and these are not all the issues that should be taken into account before making the final decision to install a solar system. Is it worth it, and is it the right financial move for you? Please call for a consultation before signing any contract to make sure a solar system is appropriate for you tax wise.
Home Backup Electric Storage Battery - Emergency power outages imposed by utilities in fire prone areas during periods of high winds and low humidity, as well as in other disaster areas, can be a major inconvenience, especially for those that work from home, resulting in many taxpayers asking if storage batteries added to a solar installation would qualify for the credit.
The tax code had been silent on whether storage batteries were eligible for the credit, although the IRS had issued a private ruling indicating that they would be allowed. The Inflation Reduction Act of 2022 amended the code by adding and defining the term “qualified battery storage technology expenditure.” Thus clarifying that for expenditures made after December 31, 2022, battery storage technology which meets the following requirements will qualify for the credit:
(A) It is installed in connection with a dwelling unit in the United States that is used as a residence by the taxpayer, and
(B) It has a capacity of not less than 3 kilowatt hours.
Homeowners who already have a solar installation can add a storage battery and qualify for the solar credit for the cost of the battery.
Home Energy Improvement Credit Is Enhanced - With the passage of the Inflation Reduction Act of 2022 the Home Energy Improvement Credit once again becomes a meaningful incentive for taxpayers to make energy-saving improvements to their homes. The new legislation did away with the minimal $500 lifetime limit by replacing it with a $1,200 annual limit and increased the credit rate from 10% to 30%.
As before, under prior law, there are certain credit limits that apply to the various types of energy-saving improvements. Although not a complete list, the following are credit limits that apply to various energy-efficient improvements under the new law:
$600 for credits with respect to residential energy property expenditures, windows, and skylights.
$250 for any exterior door ($500 total for all exterior doors).
$300 for residential qualified energy property expenses
Notwithstanding these limitations, a $2,000 annual limit applies with respect to amounts paid or incurred for specified heat pumps, heat pump water heaters, and biomass stoves and boilers.
The $1,200 credit amount is increased by up to $150 for the cost of a home energy audit.
The new law adds Air Sealing Insulation as a creditable expense.
However, the new law eliminates treatments of roofs as creditable after 2022.
This credit is a nonrefundable personal tax credit and there are no credit carryover provisions, so if the credit is not fully utilized in the year of the home energy improvements it is lost. You may wish to consult with this office prior to making any energy-saving improvements to your home to ensure you will benefit from the tax credit.
Research Credit – The Inflation Reduction Act enhanced the Research Credit for new businesses (generally, those that have been in business for 5 years or fewer) that have less than $5 million in gross receipts and that qualify for the research tax credit. These businesses can elect to use the credit to pay the employer’s share of its employees’ FICA withholding requirement (the 6.2% payroll tax).
The research credit is equal to 20% of qualified research expenditures more than the established base amount. If using the simplified method, the research credit is equal to 14% of qualified research expenditures that total more than 50% of the company’s average research expenditures in the prior three years.
Clean Vehicle Credit
After 2022 and through 2032, this credit replaces the plug-in electric vehicle credit and makes significant changes as follows.
Credit Amount – Is based upon two amounts (certified by the qualified manufacturer):
Critical Minerals – Up to $3,750.
Battery Components – Up to $3,750.
Final Assembly Requirement - The final assembly of the vehicle must occur in North America.
Not all Vehicles Will Qualify – Because of the critical mineral, battery, and final assembly requirements, only some vehicles will qualify for the credit. Noticeably missing are Toyota, Nissan, and Hyundai.
Manufacturer's Suggested Retail Price Limitation - No credit is allowed for a vehicle with a manufacturer's suggested retail price more than $80,000 for vans, sport utility vehicles, and pickups and $55,000 for other vehicles.
MAGI Limit – The credit is not allowed for high income taxpayers. No credit is allowed for any tax year if the lesser of the modified adjusted gross income (MAGI) of the taxpayer for the current tax year and the preceding tax year exceeds $300,000 for married individuals filing jointly and those qualifying as surviving spouse; $225,000 for head of household filers; and $150,000 for others.
New Clean Vehicle Definition – Must have a minimum battery capacity of 7 kilowatt-hours, up from 4 kilowatt-hours under prior law. The dealer that sells the vehicle will furnish a report to both the buyer and IRS that the vehicle qualifies for the credit and the vehicle identification number (VIN) of the vehicle.
Credit For Previously Owned Clean Vehicles
A qualified buyer who acquires and places in service a previously owned clean vehicle after 2022 and before 2032 is allowed an income tax credit equal to the lesser of $4,000 or 30% of the vehicle's sale price.
MAGI limit – The credit is not allowed for high income taxpayers. No credit is allowed for any tax year if the lesser of the modified adjusted gross income (MAGI) of the taxpayer for the current tax year and the preceding tax year exceeds $150,000 for married individuals filing jointly and those qualifying as surviving spouse; $112,500 head of household filers; and $75,000 for others.
Previously Owned Clean Vehicle - A previously owned clean vehicle is defined as a motor vehicle:
With a model year that is at least two years earlier than the calendar year in which the taxpayer acquires it.
Original use of which starts with a person other than the taxpayer,
Acquired in a qualified sale from a dealer for a price of $25,000 or less, and
Which is the first transfer since the Inflation Reduction Act's enactment to a qualified buyer other than the original buyer of the vehicle.
Qualified Buyer. A qualified buyer is an individual who:
Purchases the vehicle for use and not for resale,
Is not a dependent of another taxpayer, and
Has not been allowed a credit for a previously owned clean vehicle during the three-year period ending on the sale date.
Credit For Qualified Commercial Clean Vehicles
After 2022 and through 2032, credit is available for qualified vehicles acquired and placed in service after December 31, 2022, and before 2033.
Credit Amount - The per vehicle credit is the lesser of 15% of the vehicle's basis (30% for vehicles not powered by a gasoline or diesel engine) or the "incremental cost" of the vehicle over the cost of a comparable vehicle powered solely by a gasoline or diesel engine.
Maximum Credit - The maximum credit per vehicle is $7,500 for vehicles with gross vehicle weight ratings of less than 14,000 pounds, or $40,000 for heavier vehicles.
Qualified Commercial Clean Vehicle Requirements – Must:
Be acquired for use or lease by the taxpayer, and not for resale.
Be manufactured for use on public streets, roads, and highways, or be "mobile machinery."
Have a battery capacity of not less than 15-kilowatt hours (7-kilowatt hours for vehicles weighing less than 14,000 pounds) that is charged by an external electricity source.
Be depreciable property.
Be made by qualified manufacturers that have written agreements with and provide periodic reports to the Treasury.
Qualified commercial fuel cell vehicles are also eligible for the credit.
Standard Deduction – The standard deduction, which is used by taxpayers who do not have enough deductions to itemize them, is inflation adjusted annually. The standard deductions for 2023 are as follows:
Single & Married Filing Separately: $13,850 (up from $12,950 in 2022)
Married filing jointly: $27,700 (up from $25,900 in 2022)
Head of household: $20,800 (up from $19,400 in 2022)
Dependents: A dependent filing their own return uses the greater of the base amount, or their earned income plus an additional amount, but the total cannot exceed the regular standard deduction for the dependent’s filing status. For 2023 the base amount is $1,250 up from $1,150 in 2022 and the additional amount is $400 for both years.
Individuals who are blind and/or age 65 or over are allowed standard deduction add-ons. These add-ons are for the taxpayer and spouse but not for dependents. The add-on amounts are $1,500 for those filing jointly and surviving spouse (up from $1,400 in 2022) and $1,850 for all others (up from $1,750 in 2022).
Retirement Contributions – IRA and retirement contributions are periodically subject to inflation adjustment. However, the inflation adjustments for 2023 are substantial and increased all the retirement limits for 2023, giving all eligible taxpayers the opportunity to increase their retirement savings beginning in 2023.
Individual Retirement Accounts (IRAs) – For both traditional and Roth IRAs, the maximum contribution for 2023 has been increased to $6,500 (up from $6,000 in 2022). The additional amount taxpayers aged 50 and over can contribute remains unchanged at $1,000.
Simplified Employee Pension (SEP) Plans – The maximum amount for 2023 is $66,000 (up from $61,000 in 2022).
401(k) Plans – The maximum employee contribution for 2023 is $22,500 (up from $20,500 in 2022). The additional amount for taxpayers who’ve reached age 50 is $7,500 for 2023, up from $6,500 in 2022.
Simple Plans – The maximum elective contribution for 2023 is $15,500 (up from $14,000 in 2022). The additional 2023 amount for taxpayers aged 50 and over is $3,500 (up from $3,000 in 2022).
Tax Sheltered Annuities – The elective deferral limits for 2023 are $22,500 (up from $20,500 in 2022) and $30,000 for individuals aged 50 and over (up from $27,000 in 2022).
Health Savings Accounts (HSAs) – Although meant to be a way for individuals covered by a high-deductible health plan to save money for future medical expenses, these plans can also be used as a supplemental retirement plan. Contributions are deductible, earnings accumulate tax-free, and if distributions are used for qualified medical expenses, they are tax-free. However, when used as a supplemental retirement plan, the distributions would be taxable. The following are the contribution limits:
o Self-only coverage: $3,850 for 2023 (up from $3,650 in 2022)
o Family coverage: $7,750 for 2023 (up from $7,300 in 2022)
Other Inflation Adjusted Amounts
For tax year 2023, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $300 (up $20 from 2022).
For tax year 2023, the foreign earned income exclusion is $120,000 (up from $112,000 in 2022).
Estates of decedents who die during 2023 have a basic exclusion amount of $12,920,000, up from a total of $12,060,000 for estates of decedents who died in 2022.
The annual gift tax exclusion for gifts made in 2023 increases to $17,000 (up from $16,000 for 2022).
The maximum credit allowed for adoptions in 2023 is the amount of qualified adoption expenses up to $15,950 (up from $14,890 in 2022).
The foregoing may not represent all the changes for 2023. Congress has gotten into the habit of making tax changes and extending expiring provision until almost the end of the year and sometimes even in the midst of tax season.
For further information related to 2023 changes and inflation adjustments or to request a 2023 tax planning appointment, please give this office a call.
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PruVise, Inc. is a registered investment advisory firm in the state of California