The IRS has released its inflation-adjusted limits for 2025, affecting tax brackets, standard deductions, and retirement contributions. These changes are critical for planning and maximizing tax-efficient financial strategies.

‍

2025 Tax Brackets

The 2025 marginal tax brackets for single filers, married couples filing jointly, and heads of household have increased to reflect inflation.

Single Filers:

• 10%: Up to $11,925

• 12%: $11,926 – $48,475

• 22%: $48,476 – $103,350

• 24%: $103,351 – $197,300

• 32%: $197,301 – $250,525

• 35%: $250,526 – $626,350

• 37%: Over $626,351

Married Filing Jointly:

• 10%: Up to $23,850

• 12%: $23,851 – $96,950

• 22%: $96,951 – $206,700

• 24%: $206,701 – $394,600

• 32%: $394,601 – $501,060

• 35%: $501,061 – $751,600

• 37%: Over $751,600

‍

Standard Deduction

The standard deduction for 2025 has also been adjusted.

• Single Filers: $15,000 (up from $14,600 in 2024)

• Married Filing Jointly: $30,000 (up from $29,200 in 2024)

• Head of Household: $22,500 (up from $21,900 in 2024)

‍

Retirement Contribution Limits

Retirement savings plans have updated limits for 2025, enabling individuals to save more toward their future.

401(k), 403(b), and 457 Plans:

• Contribution limit: $23,500 (up from $23,000 in 2024)

• Catch-up (age 50+): $7,500

• Catch-up (age 60-63): $11,250

IRA Contributions:

• Limit: $7,000 (unchanged)

• Catch-up (age 50+): $1,000

Roth IRA Income Limits:

• Phase-out for single filers: $150,000–$165,000

• Phase-out for married filing jointly: $236,000–$246,000

SEP IRA Contributions:

• Contribution limit: $70,000 (up from $69,000 in 2024)

SIMPLE IRA Contributions:

• Contribution limit: $16,500 (up from $16,000 in 2024)

• Catch-up (age 50-59 and 64+): $3,500

• Catch-up (age 60-63) $5,250

‍

Healthcare

Healthcare savings plans have updated limits for 2025 as well.

• FSA Contribution Limit: $3,300 (up from $3,200 in 2024)

• HSA Single Coverage Contribution Limit: $4,300 (up from $4,150 in 2024)

• HSA Family Coverage Contribution Limit: $8,550 (up from $8,300 in 2024)

• Catch-up (age 55+): $1,000

‍

Estate and Gift Tax Exemption  

• Estate tax exemption: $13,990,000 per individual ($27,980,000 for married couple)

• Estate and gift tax rate: 40%

• Annual Gift Tax Exclusion: $19,000 (up from $18,000 in 2024)

‍

Social Security  

• Cost of living adjustment (COLA): +2.5% (+3.2% in 2024)

• Maximum benefit: $4,018) (up from $3,822 in 2024)

• Maximum earnings subject to Social Security Tax: $176,100 (up from $168,600 in 2024)

‍

These updated figures present an opportunity to revisit your tax and retirement strategies. Maximizing contributions and understanding the thresholds can help reduce your tax burden and bolster retirement readiness. For any personalized guidance, please contact us to align these changes with your financial plan.

‍

‍

Unless otherwise indicated, commentary on this site reflects the personal opinions, viewpoints and analyses of the author and should not be regarded as a description of services provided by GatePass Capital or its affiliates. The opinions expressed here are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any security or advisory service. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice. While all information presented, including from independent sources, is believed to be accurate, we make no representation or warranty as to accuracy or completeness. We reserve the right to change any part of these materials without notice and assume no obligation to provide updates. Nothing on this site constitutes investment advice, performance data or a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Investing involves the risk of loss of some or all of an investment. Past performance is no guarantee of future results.

‍