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Things are a-changing!

Things are a-changing!

November 14, 2022

This newsletter is going to be a bit of potpourri, because it is that time of year… which reminds me of a story.  It was 1987 and we had just moved to Webster City, Iowa.  My mom was trying to spruce up the house for the holidays and she filled a pan with water, put it on the stove and poured in a bag of potpourri to let it simmer throughout the day.  My dad came home for lunch and my mom got busy, and pretty soon, the pan was bone dry.  It was a great mystery to her how that all boiled away so quickly.  It turns out my dad thought it was tea and drank it all at lunchtime!  Afterwards he said “It sure did smell good, but it was a little bitter.”  We all had a good laugh with my dad.

Remembering these stories about growing up usually leads us to rose-colored glasses.   Things were better back then. Things were simpler, right?  I’ve actually gotten to the age where I’m considered ‘old’ by my kids.  They take delight in pointing out gray hairs and my geriatric tendencies (like cloth hankies).   I take their ribbing as a compliment because wisdom is lost on the young.  It reminds me of the old Mark Twain quote about his father.  He said, “When I was 16, my father was so ignorant I couldn’t stand to be seen with him.  By the time I was 22, I was amazed how much the old chap had learned in 6 years!” Let’s just say, I’m looking forward to sweet redemption when my kids are 22.  Current parents of 22- year-olds tell me not to hold my breath.  I just hope my kids develop rose-colored glasses about their own childhood. 

Even though I’ve seen quite a few years come and go, the holidays and the new year are still exciting.  One of my old coaches always said, “Life is just a series of adjustments.”  The adjustments of a new year are sometimes financial, and there are a slew of changes for 2023.  Due to the elevated inflation in our economy this year, there are several important numbers that adjust automatically for inflation.  For instance, the federal tax ‘standard deduction’ in 2022 for a married couple filing jointly (MFJ) is $25,900.  In 2023 that goes up to $27,700.  That means you won’t have to pay federal taxes on an additional $1,800 of your income in 2023.  Also, the tax brackets are growing in size, so more of your money will be taxed at lower rates.  For instance, the 12% federal tax bracket for married couples(MFJ) tops out at over $83,000 in 2022, but grows to over $89,000 in 2023.  That means $6,000 more of your income will be taxed in the 12% bracket instead of the 22% bracket next year.  I like those types of adjustments!   There are many other things happening too.  Note: The 2023 tax year adjustments described apply to tax returns filed in 2024.  Please contact your accountant for personalized tax advice.

Please see the related links below that provide and expand on the official updates. 

2022                       2023

Annual gift exclusion amount                       $16,000                 $17,000

Standard Deduction(MFJ)                            $25,900                 $27,700

401k annual contribution limits*                   $20,500                 $22,500

If over 50                                                       $27,000                 $30,000

IRA/Roth IRA contribution limits **              $6,000                   $6,500

If over 50                                                        $7,000                   $7,500

Roth contribution income limits(MFJ)           $214,000             $228,000

HSA contribution limits                                  $7,300                   $7,750

If over 55                                                        $8,300                   $8,750

Continued…                                                       2022                       2023

SIMPLE IRA contribution limits                      $14,000                 $15,500

If over 50                                                          $17,000                 $19,000

Iowa tax on retirement income***                        4-6%                         0%

Iowa Income tax                                                    0-7%                      0-6%     

SS cost of living  increase****                             5.9%                      8.7%                                     

Earning subject to SS payroll tax                     $147,000              $160,200


*IRS Retirement Account Adjustments -


**IRS General Tax Adjustments -


***Iowa Tax Bill 2023 -


****Social Security Cost of Living Adjustment Website -,payments%20made%20for%20January%202023.