7 Key Tax Changes for 2025 You Should Know

With the IRS announcing new tax updates for 2025, it’s essential to understand how these adjustments impact your filing in 2026. This year’s modifications reflect inflation and bring changes to tax brackets, standard deductions, retirement contributions, and healthcare plan limits. Here’s a breakdown to help you prepare effectively.

Tax Bracket Adjustments for 2025

To counter inflation, the IRS has updated tax brackets:

• Standard Deduction Increase: Single filers and married individuals filing separately will see a $400 increase, raising the deduction to $15,000. Married couples filing jointly will have a new deduction of $30,000.
• Alternative Minimum Tax (AMT): Adjustments to AMT exemptions also aim to ease inflation impacts on taxpayers.

Retirement Contribution Limits Are Rising

In 2025, individuals can contribute more to 401(k) plans. Those aged 60 to 63 also have a higher cap on catch-up contributions, allowing greater retirement savings.

Healthcare Plan Adjustments

The IRS has updated the limits for healthcare plan contributions, encouraging taxpayers to maximize these options and benefit from the tax advantages.

Preparing for tax season early can help you maximize benefits and avoid surprises. With these new changes, reviewing your 2024 tax return and planning ahead can set you up for smoother filing in 2026.

Are you ready for these 2025 tax updates? Review your financial plans and consult with a tax advisor today!

For more information on tax planning, visit the IRS website and consult your financial advisor.