Important Tax Numbers for 2025
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By: Michael Foster, CFA, CFP®
*In my best Chris Berman voice*
Goodbye football season, hello tax season! In the grand ledger of Super Bowl LIX, the Philadelphia Eagles meticulously audited the Kansas City Chiefs, revealing a substantial $40 to $22 deficit. After a taxing year of injuries, Jalen Hurts and the Eagles held the Chiefs accountable for not investing in the offensive line, sacking Patrick Mahomes multiple times. Philadelphia made quarterly payments to the end zone and left Kansas City fans looking for a refund.
Here’s to hoping you have a Barney Varmn sense of humor when it comes to horrible accounting puns.
Tax season can be a lot to keep up with. It’s an inherently backward-looking time recapping the prior year. While this is undoubtedly important, I think it’s also critical to focus on what you can do in 2025 to set yourself up for success next year. A part of that is understanding what tax numbers have changed from the prior year. The new IRS tax inflation adjustments have officially taken effect for 2025. I’ve highlighted a few below that tend to come up most often with our clients, but you can find all of the adjustments on the IRS website here.
Happy filing!
Michael
Standard Deduction
- Married Filing Jointly: Increased to $30,000, up from $29,200 in 2024.
- Single Filers: Increased to $15,000, up from $14,600 in 2024.
Tax Bracket Marginal Rates
The IRS has adjusted income tax brackets for inflation in 2025. While the specific income ranges for each bracket have been updated, the marginal tax rates remain unchanged. Find more here.
Annual Gift Exclusions
- The annual gift tax exclusion has increased to $19,000 per recipient, up from $18,000 in 2024.
Employer-Sponsored 401(k) Plan Contribution Limits
- Employee Contribution Limit: Increased to $23,500, up from $23,000 in 2024.
- Catch-Up Contributions (Age 50 and Over): Remains at $7,500.
- Special Catch-Up Contributions (Ages 60 to 63): Starting in 2025, individuals aged 60 to 63 can make catch-up contributions up to $11,250.
Roth IRA Income Limits
- Single Filers:
- Full Contribution: Allowed if Modified Adjusted Gross Income (MAGI) is less than $150,000.
- Phase-Out Range: Partial contributions allowed for MAGI between $150,000 and $165,000.
- Ineligible: No contribution allowed if MAGI exceeds $165,000.
- Married Filing Jointly:
- Full Contribution: Allowed if combined MAGI is less than $236,000.
- Phase-Out Range: Partial contributions allowed for MAGI between $236,000 and $246,000.
- Ineligible: No contribution allowed if MAGI exceeds $246,000.
Health Savings Account (HSA) Contribution Limits
- Individual Coverage: Increased to $4,300, up from $4,150 in 2024.
- Family Coverage: Increased to $8,550, up from $8,300 in 2024.
- Catch-Up Contributions (Age 55 and Over): Remains at $1,000.
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Ben Dolan and Michael Foster are investment advisor representatives of Dolan Capital Advisors, Inc., a SEC-registered investment adviser. Investment advice offered through Dolan Capital Advisors, Inc.