More on IRS 2023 Dollar Limits on Compensation and Benefits
Sharing additional insights with you from IslerDare PC on the 2023 IRS Dollar Limits on Compensation and Benefits. Be sure to also read IRS Announces 2023 Retirement Plan Contribution Limits.
The Internal Revenue Service recently announced the annual cost-of-living adjustments to the dollar limits that will apply in 2023 to various employer-sponsored benefit plans. As expected, the IRS significantly increased most of these limits to account for inflation. The 2023 limits are summarized in the table that follows on the next page.
IRS 2023 Dollar Limits on Compensation and Benefits
Highlights of the changes include:
- A $2,000 increase in the amount employees can contribute annually to a 401(k), 403(b) or 457(b) plan, which moves from $20,500 to $22,500.
- A $1,000 increase in the additional “catch-up contributions” employees age 50+ can contribute to a 401(k) or 403(b) plan from $6,500 to $7,500.
- A $5,000 change in the total amount of combined employee and employer contributions that can be made on behalf of an employee under a defined contribution plan, increasing from $61,000 to $66,000 (not counting any catch-up contributions).
- A $25,000 change in the amount of compensation that can be taken into account when computing plan contributions, increasing from $305,000 to $330,000.
- Modest increases in the amount employees can contribute to a health flexible spending account or health savings account.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated herein.
Securities offered through Lion Street Financial, LLC (LSF) and Valmark Securities, Inc. (VSI), each a member of FINRA and SIPC. Investment advisory services offered through Lion Street Advisors, LLC (LSA) and Valmark Advisers, Inc. (VAI), each an SEC registered investment advisor. Please refer to your investment advisory agreement and the Form ADV disclosures provided to you for more information. VAI/VSI and LSF/LSA are non-affiliated entities and separate entities from OneDigital.
Unless otherwise noted, VAI/VSI, LSF/LSA are not affiliated, associated, authorized, endorsed by, or in any way officially connected with any other company, agency or government agency identified or referenced in this document.