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Archive for October, 2022

IRS Announces 2023 Inflation Adjustments

Posted by taxguru on October 18, 2022

There are few aspects of life that are untouched by the current Biden created inflation. While most are bad consequences, some are pretty nice. Social Security recipients will have a large increase in our monthly payments. Bank savings accounts are now back to paying actual interest on deposits.

As I have covered for several years, IRS is required by law to index a lot of tax items for the higher cost of living in order to prevent inflation caused Bracket Creep, where raises received by people in order to offset higher living costs push them into higher percentage tax brackets.

Side-Note: Every so often some of our genius rulers in DC will float the idea of doing away with these annual inflation adjustments, citing the huge amounts of extra money the Federal government will collect as a result. Luckily, those plans don’t usually get very far in DC.

The math wizards at IRS have done the calculations and have come up with the inflation adjustments for over 60 items in the Tax Code that will take effect as of January 1, 2023.

The IRS Press Release with a general summary of some of the changes, as well as some obvious typos referencing incorrect years:
IRS provides tax inflation adjustments for tax year 2023

Many more specific details can be found in this 28 page PDF version of Revenue Procedure 2022-38.

Gift Tax Exemption Increases
Having this info almost two and a half months before the end of 2022 can be quite useful for people working up tax plans that cross multiple years. Besides the effects of these inflation adjustments on income taxes for 2023, a more interesting change is the annual Gift Tax exclusion. As I have described many times before, this figure often remains steady for a number of years before being bumped up because it is only allowed to increase in even one thousand dollar increments based on the cumulative inflation factor since the previous increase. This is the first time that I can recall the amount increasing in two consecutive years: to $17,000 in 2023, from the $16,000 amount we have had for 2022. Many people use these annual gift tax exemptions as part of their long term Estate and Gifting strategies.

Out of curiosity, I dug up the recent history of the annual Gift Tax exemption amounts so we can see how rare it is to have an increase so soon after a previous one.

1997 – 2001 $10,000 per donor (giver) per donee (recipient)
2002 – 2005 $11,000
2006 – 2008 $12,000
2009 – 2012 $13,000
2013 – 2017 $14,000
2018 – 2021 $15,000
2022 – 2022 $16,000
2023 – ???? $17,000

Posted in Gifting, inflation, IRS | Comments Off on IRS Announces 2023 Inflation Adjustments

New TaxMan Video from The Beatles

Posted by taxguru on October 15, 2022

For decades, a hobby of mine has been collecting and sharing different versions of George Harrison’s song “TaxMan” which was first heard on the Beatles’ 1966 album, Revolver. For obvious reasons, most of the versions have been covers by other artists and groups. We now have a new 2022 animated video version by The Beatles.

Over the past few years, Giles Martin, the son of the original Beatles producer, George Martin, has been working with the surviving Beatles, along with George and John’s families, to assemble newly remastered versions of their albums, using more modern technology than was available back in the 1960s. They have also included several out-takes and alternative studio versions from the Beatles’ recording sessions.

In a few weeks, on October 28, they will be releasing the new remixed and expanded version of Revolver, which is supposed to include alternative versions of TaxMan. Thanks to this article from the Ultimate Classic Rock website, I learned of this new video of the Beatles singing TaxMan with creative animations of the lyrics. I have already added this to my YouTube TaxMan playlist.

Posted in Beatles, Music, TaxMan, video | Comments Off on New TaxMan Video from The Beatles