You’re probably familiar with the more obvious ways inflation affects your finances. Your money doesn’t go as far at the grocery store, for example. But other ways inflation helps or hurts have gotten less attention.
Liz Weston, CFP®, NerdWallet The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.By now, you’re probably familiar with the more obvious ways inflation affects your finances. Your money doesn’t go as far at the grocery store, for example.
In addition, the IRS adjusted federal tax brackets upward by about 7%. The larger deduction, higher brackets and other changes mean most taxpayers will pay less in 2023, especially if their incomes haven’t kept pace with inflation. The annual exclusion for gifts — the amount you can give away to an individual before you’re required to file a gift tax return — goes up by $1,000 to $17,000. You won’t owe gift taxes until the amount you give away above that annual limit exceeds the lifetime estate and gift exemption limit, which is now $12,920,000, up a whopping $860,000 from 2022.
Retirement contributions can riseThe amount people can contribute to 401 plans, 403 plans and other workplace retirement plans will rise by $2,000 to $22,500 for those younger than 50. Catch-up contributions for people 50 and older rose by $1,000 to $7,500, which means older people can contribute $30,000 in 2023.
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