Tax Changes 2023 (Federal/Colorado)

[Ryan Lesley]

Hey BP Nation,

This might be stale news to some, but I just wanted to share a few tax changes I have been sharing with my clients and thought was interesting. As the title reveals, they are Federal changes with one very interesting change to Colorado in particular. Hope you find the information useful.

Tax Changes for the New Year

• - IRS increases the lifetime estate-tax exclusion from $12.06 million in 2022 by nearly $1 million, to $12.96 million in 2023. Couples can combine their exclusions, enabling them to pass on nearly $26 million, before or after death
• - Colorado (Act SB22-238) reduces the valuation for assessment of residential property, including multi-family residential property, from 6.9% to 6.765% of the actual value of the property (Increasing to 6.8% in 2024); and reduces the actual value used for purposes of the valuation for assessment of commercial real property by $30,000 and of residential real property by $15,000
• - IRS allowing bigger contributions to retirement accounts: Employee deferrals increase from $20,500 to $22,500, catch-up deposits (over 50) increase from $6500 to $7500 (all increases apply to 403(b) plans, most 457 plans and Thrift Savings Plans), and contribution limits for IRA's have increased from $6,000 to $6,500 while catch-up contributions (50 and older) remains at $1,000
• -IRS increases income thresholds for the Long-Term capital gains brackets: 0% Single (up to $44,625) / Married (up to $89,250), 15% Single (up to $492,300) / Married (up to $553,850), 20% Single ($492.301 and up) / Married ($553,851 and up)

References:

1. https://www.mansionglobal.com/articles/5-property-tax-changes-hitting-u-s-homeowners-in-2023-01672313496
2. https://leg.colorado.gov/bills/sb22-238
3. https://www.cnbc.com/2022/12/31/5-tax-investment-changes-that-could-boost-your-finances-in-2023.html
4. https://www.cnbc.com/2022/10/20/irs-how-much-income-you-can-have-for-0percent-capital-gains-taxes-in-2023.html
5. https://www.redfin.com/city/6463/CO/Estes-Park/housing-market