The following changes are in
effect for 2025 (Ref: IRS Revenue Procedure 2024-40, IRS Notice
2024-80):
Social
Security Wage Base: $176,100 (4.45% increase)
Kiddie
Tax: For 2025, the first $1,350 of a child’s
unearned income is tax-free. The
next $1,350 is taxed at the child’s rate. Unearned income above $2,700 will
be taxed at the same rate as the parent’s rate.
Child
Tax Credit: The maximum credit is
$1,700, which is fully refundable (you can receive the full credit even if you
have no tax liability). Children older than age 16 do not qualify for this
credit.
Deduction
for State and Local Taxes: $10,000 (No change - limited by TCJA)
Employer Retirement Plans and Other Plan Limits:
|
Elective Deferral Limit for 401(k), 403(b),
and 457 Plans |
$23,500 |
|
Catch-up Contribution Limit for 401(k),
403(b), and 457 Plans |
$7,500 |
|
New “Special” Catch Up
Contribution Limit for persons between ages 61 – 63 in 2025 |
$11,250 |
|
Defined Contribution Plan Annual Additions
Limit |
$70,000 |
|
Retirement Plan Annual Compensation Limit |
$350,000 |
|
Definition of Highly Compensated Employee |
$160,000 |
|
Definition of Key Employee |
$230,000 |
|
SEP Minimum Compensation Threshold for
Participation |
$750 |
|
SEP Contribution Limit |
$70,000 |
|
SIMPLE Pre-tax Contribution Limit |
$16,500 |
|
SIMPLE Catch-up Contribution Limit |
Greater of $5,000 or 150% of the regular age
50 catch-up limit |
|
FSA Contribution Limit |
$3,300 |
|
IRA Contribution Limit |
$7,000 (unchanged) |
|
IRA Catch Up Contribution Limit |
$1,000 (unchanged) |
|
FSA Carryover Limit |
$660 |
|
HSA Contribution Limit – Family |
$8,550 |
|
HSA Contribution Limit – Single |
$4,300 |
|
HSA Over 55 Catch-Up Contribution Limit |
$1,000 |
Tax Rate Schedules and Tax
Brackets
|
Tax Rate |
Single |
Married Joint |
Married Separate |
Head of Household |
|
10% |
$0 - $11,925 |
$0 - $23,850 |
$0 - $11,925 |
$0 - $17,000 |
|
12% |
$11,926 - $48,475 |
$23,851 - $96,950 |
$11,926 - $48,475 |
$17,001 - $64,850 |
|
22% |
$48,476 - $103,350 |
$96,951 - $206,700 |
$48,476 - $103,350 |
$64,851 - $103,350 |
|
24% |
$103,351 - $197,300 |
$206,701 - $394,600 |
$103,351 - $197,300 |
$103,351 - $197,300 |
|
32% |
$197,301 - $250,525 |
$394,601 - $501,050 |
$197,301 - $250,525 |
$197,301 - $250,500 |
|
35% |
$250,526 - $626,350 |
$501,051 - $751,600 |
$250,526 – $375,800 |
$250,501 - $626,350 |
|
37% |
Over $626,350 |
Over $751,600 |
Over $375,800 |
Over $626,350 |
Capital Gains Tax Brackets for Individuals
|
Tax Rate |
Unmarried, Taxable Income Up To |
Married Joint Returns, Taxable Income Up To |
Heads of Households, Taxable Income Up To |
|
0% |
$48,350 |
$96,700 |
$64,750 |
|
15% |
$533,400 |
$600,050 |
$566,700 |
|
20% |
Over $533,400 |
Over $600,050 |
Over $566,700 |
Tax Rate |
Taxable Income |
10% |
$0 - $3,150 |
24% |
$3,151 - $11,450 |
35% |
$11,451 – 15,650 |
37% |
Over $15,650 |
Capital Gains Tax Brackets for
Estates and Trusts
Tax Rate |
Taxable Income Up To |
0% |
$0 - $3,250 |
15% |
$3,251 - $15,900 |
20% |
Over $15,900 |
Filing Status |
Standard Deduction |
MFJ or Surviving Spouse |
$30,000 |
Single (Other than HoH or Surviving Spouse) |
$15,000 |
Head of Household |
$22,500 |
Estate and Gift Tax Exclusion: $13,990,000
Annual Gift Tax
Exclusion: $19,000