What to Know About 2025 Tax Changes: Brackets, Deductions, and Contributions
The IRS has announced several key changes for the 2025 tax year to account for inflation, impacting tax brackets, standard deductions, and retirement contributions. The standard deduction will rise by $400 for single filers, reaching $15,000, and by $800 for married couples filing jointly, bringing it to $30,000. Adjustments to the Alternative Minimum Tax (AMT) exemption and Earned Income Tax Credits will also provide modest relief. Tax brackets were similarly adjusted to help ensure most taxpayers' income isn’t taxed at a higher rate due to inflation.
For retirement planning, those with 401(k) accounts will be able to contribute an additional $500 in 2025, though IRA contribution limits remain the same. Notably, individuals aged 60 to 63 will see an increased catch-up contribution cap of $11,250, offering them an opportunity to boost their retirement savings significantly. Financial experts recommend assessing your 2024 tax situation and planning for these upcoming changes to maximize savings and deductions.
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