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Key numbers to consider as you ponder crucial goals
Below you’ll find key numbers to consider as you ponder crucial goals like saving enough for retirement and college expenses, amounts to give to charities, and planning for changes in your estate. Keep in mind that, while averages are interesting, your individual situation may differ. As you think about goals such as how to save for your children’s college costs and how to limit this year’s tax bill, please consult a Citi Personal Wealth Management Financial Advisor, who can coordinate financial planning strategies with your tax advisor.
This chart shows the average cost of living for raising children, paying for education, home
ownership, retirement, medical expenses, and nursing home costs in the U.S.
This chart indicates the percentages of U.S. families who have retirement accounts, own
their own homes and vehicles, have debt with credit card balances, mortgages or other
home-secured debt.
Please note: With the “Cost of Living” and “Family Financial Snapshot” sections, some data is based on studies and surveys conducted prior to 2022, where updated versions of the studies and surveys were not available.
| 2023 | 2022 | |
|---|---|---|
| Earnings subject to Social Security payroll tax: | $160,200 | $147,000 |
|
Maximum federal income-tax rate of 37% if income above: |
$693,750 if married filing jointly $578,125 if single |
$647,850 if married filing jointly $539,900 if single |
|
3.8% Medicare surtax applies to net investment income if total income above: |
$250,000 if married filing jointly $200,000 if single |
$250,000 if married filing jointly $200,000 if single |
| Standard deduction:1 |
$27,700 if married filing jointly $13,850 if single |
$25,900 if married filing jointly $12,950 if single |
| Personal exemption: | None | None |
| Gift tax exclusion: | $17,000 | $16,000 |
| Estate tax exclusion: | $12.92 million | $12.06 million |
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This table compares some key U.S. Federal Income Tax numbers between 2022 and 2023,
from payroll taxes and income tax rates to gift and estate tax exclusions.
1 For 2023, as in 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized
deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
| 2023 | 2022 | |
|---|---|---|
| Traditional and Roth IRA contribution limit.1 | $6,500 ($7,500 if age 50 or older) | $6,000 ($7,000 if age 50 or older) |
|
If covered by retirement plan at work, traditional IRA deduction phases out at: |
$116,000 to $136,000 if married filing jointly $73,000 to $83,000 if single |
$109,000 to $129,000 if married filing jointly $68,000 to $78,000 if single |
|
If spouse covered by retirement plan but you, aren't, your IRA deduction phases out at: |
$218,000 to $228,000 in joint income | $204,000 to $214,000 in joint income |
|
Eligibility to fund a Roth IRA phases out at these incomes: |
$218,000 to $228,000 if married filing jointly $138,000 to $153,000 if single |
$204,000 to $214,000 if married filing jointly $129,000 to $144,000 if single |
| 401(k) contribution limit: | $22,500 ($30,000 if age 50 or older) | $20,500 ($27,000 if age 50 or older) |
| SIMPLE IRA contribution limit: | $15,500 ($19,000 if age 50 or older) | $14,000 ($17,000 if age 50 or older) |
| SEP IRA contribution limit:2 | 25% of employee annual compensation, up to $66,000 | 25% of employee annual compensation, up to $61,000 |
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This table compares retirement related U.S. Federal Income Tax numbers between 2022 and
2023, from IRA contribution limits to deduction phase out dollar amounts based upon various
scenarios.
1 There are no income eligibility limits for contributions to a Traditional IRA. But if
you or your spouse are covered by a workplace retirement plan, income limits apply for deducting
annual contributions. With a Roth IRA, various income eligibility limits apply. Note that earned
income is generally required in order to contribute to an IRA. Please see the IRS website for
current information: irs.gov/retirement-plans/traditional-and-roth-iras.
2 The employer makes contributions to a SEP IRA for employees. Contribution limits listed
in the table are for the employer. Employee contributions are not permitted.
| 2023 | 2022 | |
|---|---|---|
| UGMA/UTMA account: | Up to $17,000 without worrying about gift tax1 | Up to $16,000 without worrying about gift tax1 |
| Kiddie tax on unearned income: | First $1,250 covered by child’s exemption2 | First $1,150 covered by child’s exemption2 |
| 529 college savings plans: | Can contribute $85,0003 and count it as your gift for next five years ($170,000 per married couple) | Can contribute $80,0003 and count it as your gift for next five years ($160,000 per married couple) |
|
Coverdell education savings account: |
$2,000 maximum contribution | $2,000 maximum contribution |
|
Eligibility to contribute phases out at these incomes |
$190,000 to $220,000 if married filing jointly $95,000 to $110,000 if single |
$190,000 to $220,000 if married filing jointly $95,000 to $110,000 if single |
| Hope Scholarship/American Opportunity Credit: | $2,500 maximum per student | $2,500 maximum per student |
| Phases out at these incomes: |
Phaseout begins at $160,000 if married filing jointly Phaseout begins at $80,000 if single |
Phaseout begins at $160,000 if married filing jointly Phaseout begins at $80,000 if single |
| Lifetime Learning Credit: | $2,000 maximum | $2,000 maximum |
| Phases out at these incomes: |
Phaseout begins at $160,000 if married
filing jointly Phaseout begins at $80,000 if single |
Phaseout begins at $160,000 if married
filing jointly Phaseout begins at $80,000 if single |
| Education loan interest deduction: | $2,500 maximum | $2,500 maximum |
| Phases out at these incomes: |
$155,000 to $185,000 if married filing jointly $70,000 to $85,000 if single |
$145,000 to $175,000 if married filing jointly $70,000 to $85,000 if single |
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This table compares college expense related U.S. Federal Income Tax numbers between 2022 and
2023, from UGMA/UTMA accounts, 529 plans and Coverdell savings accounts to Lifetime Learning
Credits and education loan interest deductions.
1 There is no limit but annual gifts above $16,000 in 2022
and $17,000 in 2023 a year typically require a gift tax return to be filed with the IRS. Any amount
in excess of $16,000/$17,000 in a year must be counted toward the individual’s lifetime gift-tax
exclusion limits referenced above.
2 In 2022 the next $1,150 is taxed at the child’s marginal
tax rate. All amounts above $2,300 are taxed at the parents’ marginal tax rate. In 2023 the next
$1,250 is taxed at the child’s marginal tax rate. All amounts above $2,500 are taxed at the parents’
marginal tax rate.
3 Five times annual gift-tax exclusion. Consult a tax
advisor for important considerations regarding the five times annual gift-tax exclusion.
