Recently, the IRS announced its cost of living adjustments for the dollar limitations on flexible spending accounts, health savings accounts, and retirement plans for the 2023 tax year. Due to the increasing inflation, many of these limits went up significantly at some of the highest rates of this century.
| Flexible Spending Account Increases | 2022 | 2023 |
| Healthcare Deferral Limit | $2,850 | $3,050 |
| Healthcare Carryover Limit | $570 | $610 |
| Parking Limit | $280 | $300 |
| Mass Transit Limit | $280 | $300 |
| Dependent Care with Married and Joint Taxes or Head of House | $5,000 | $5,000 |
| Dependent Care with Married and Separate Taxes | $2,500 | $2,500 |
| Health Savings Accounts | 2022 | 2023 |
| Contribution Limit – Self-Only | $3,650 | $3,850 |
| Contribution Limit – Family Coverage | $7,750 | $7,750 |
| Retirement Savings Increases | 2022 | 2023 |
| 401(k), 403(b), & 457(b) Elective Deferral Limit | $20,500 | $22,500 |
| Catch-Up Contribution Limit | $6,500 | $7,500 |
| Defined Contribution Limit | $61,000 | $66,000 |
| Defined Benefit Limit | $245,000 | $265,000 |
| Annual Compensation Limit | $305,000 | $330,000 |
| Highly-Compensated Employee Threshold | $135,000 | $150,000 |
| Top Heavy Key Employee Threshold | $200,000 | $215,000 |
| Social Security Taxable Wage Base | $147,000 | $160,200 |
Questions on how to keep in compliance with these increases? Give us a call today!