2023 planning guide

Summarizes key personal tax planning issues from income taxes to retirement planning to estate planning strategies.

by Brad Dillon, Senior Wealth Strategist, Advanced Planning Group 23 Feb 2023

Inflation was no doubt the word of the year in 2022. Having peaked at just above 9% in the middle of last year, inflation was a drag on the markets, consumers’ cost of living and mortgage rates. But it’s not all bad news. The peak occurred just before the Internal Revenue Service (IRS) and Treasury Department used the consumer price index’s inflation rate to calculate various adjustments throughout the Internal Revenue Code for tax year 2023, resulting in perhaps the only piece of good news that came from inflation’s relentless pursuit last year: overall effective tax rates are down for many taxpayers this year compared to last.

Some examples showcase the positive effects of inflation on effective tax rates. For 2023, the highest marginal federal income tax rate of 37% for a married couple filing joint returns will take effect on income over $693,750, up from $647,850 in 2022.

The difference will be taxed in a lower rate bracket in 2023 versus 2022. Another example: for US persons, the federal estate and gift tax exemption amount increased by almost $900,000 per person from $12.06 million last year to $12.92 million (or $25.84 million for married couples) this year, creating significant new opportunities for gifting, even for those who had previously used up all of their available exemptions. There are other substantial increases we cover in this guide, including to the gift tax annual exclusion amount (which now stands at $17,000), the standard deduction, the Social Security cost of living adjustment and contribution limitations to retirement accounts.

Other than to outline some of these new figures, the purpose of this guide is to summarize some key aspects of the tax laws affecting ultra high net worth (UHNW) individuals and families and is organized into three sections:

  • income tax planning,
  • retirement planning and
  • estate planning.

The first of these sections deals primarily with income tax planning and lists updated figures for applicable rates and brackets, as well as a discussion of key concepts in income tax planning. The second section discusses retirement planning, including an outline of the tax rules for traditional individual retirement accounts (IRAs), Roth IRAs and required minimum distributions, before concluding with a discussion of Social Security and Medicare benefits. Finally, the section on estate planning outlines key concepts and changes to the gift and estate taxes in 2023.

Please note: The complete publication, including important information and disclosures, can be downloaded via the link below.

Browse additional articles available from UBS Advanced Planning on topics of interest to ultra high net worth clients and their families.

Purpose of this material.
The information on this page and in the attached document is provided for informational and educational purposes only. It should be used solely for the purposes of discussion with your UBS Financial Advisor and your independent consideration. UBS does not intend this to be fiduciary or best interest investment advice or a recommendation that you take a particular course of action.

No tax or legal advice.
UBS Financial Services Inc., its affiliates and its employees do not provide tax or legal advice. You should consult with your personal tax and/or legal advisors regarding your particular situation.

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