J.K. Lasser's 1001 Deductions and Tax Breaks 2023, 3rd Edition

APPENDIX AItems Adjusted Annually for Inflation

Law changes are one important way in which write‐off amounts and restrictions on them change each year. But another, less obvious way is adjustments to certain amounts and limits reflecting cost‐of‐living changes. Cost of‐living adjustments are pegged to the Chained Consumer Price Index for All Urban Consumers (C‐CPI‐U). Not all items subject to adjustment actually change each year, but the list of the items subject to change continues to grow.

To help you plan your taxes for the future, it's helpful to know that certain limits affecting exclusions, deductions, and credits are raised in step with increases in the cost of living (although some items may be adjusted downward if the times demand it). The following exclusions, deductions, and credits are subject to annual adjustments for inflation:

401(k) 403(b), and 457 plan elective deferrals

accelerated death benefits daily dollar amount that can be paid tax free from a life insurance policy on account of chronic illness

adoption assistance programs the maximum dollar amount and AGI phaseout range

adoption credit the maximum dollar amount and the AGI phaseout range

affordable health coverage provided by an employer and which prevents eligibility for the premium tax credit

alternative minimum tax (AMT) exemption amount

alternative minimum taxable income for the 26% rate

Archer medical savings accounts the definition of a high‐deductible plan (i.e., the range for an annual deductible) ...