Tax Bracket Changes in 2025
The IRS recently announced important changes to tax brackets, standard deductions, and retirement contribution limits for 2025. These adjustments, driven by inflation, impact your tax planning and savings strategies.
Whether you’re proactively optimizing your strategy or already facing an IRS challenge, our tax attorneys can help. We focus on resolving IRS tax controversies and ensuring you comply with the latest regulations. Schedule a consultation with one of our tax attorneys today.
Federal Tax Brackets and Standard Deduction
Both the standard deduction and income tax brackets have increased for 2025. This means you may owe less in taxes compared to previous years.
Standard Deduction
- Single filers: Increased to $15,000 from $14,600
- Married filing separately: Increased to $15,000 from $14,600
- Married filing jointly: Increased to $30,000 from $29,200
- Heads of household: Increased to $22,500 from $21,900
Federal Tax Brackets
All federal tax brackets have been increased. The top tax rate of 37% now applies to single filers with taxable income above $626,350 and married couples above $751,600.
Capital Gains Rates
Planning to sell assets in 2025? Be aware of the tax rate on capital gains.
The 0% rate applies to long-term capital gains for single individuals with taxable income up to $48,350 and married couples filing jointly up to $96,700.
Rates then jump to 15%. This will apply to taxable income up to $533,400 for single individuals and $600,050 for married couples.
Above these thresholds, the rate rises to 20%.
Any taxpayers who have an adjusted gross income over $200,000 ($250,000 for married filing jointly) will receive a 3.8% surtax on long-term capital gain rates.
Want help minimizing your tax liability when selling assets? Contact our tax attorneys.
401(k) and IRA Contribution Limits
Contribution limits have increased in 2025, allowing you to save more with your retirement plan.
- 401(k)s: The 401(k) plan contribution limit will increase to $23,500 from $22,500.
- IRAs: Contribution limits for traditional and Roth IRAs remain at $7,000, with an additional $1,000 catch-up contribution for those 50 and older.
SIMPLE and SEP IRAs, as well as other types of retirement accounts, saw increases in maximum contribution amounts.
Estate and Gift Tax Exclusion
The unified estate and gift tax exclusion has also been adjusted. For estates of decedents who pass in 2025, the exclusion will be increased to $13,990,000 from $13,610,000.
The annual gift exclusion will increase to $19,000 from $18,000.
Ensure your estate plan is up-to-date with the latest regulations. Schedule a meeting with our experienced estate and tax attorneys to discuss your estate planning needs.
Prepare for the 2025 Tax Season
Want more information about how to maximize your tax returns in 2025? Frost Law’s team of tax attorney is here to provide personalized guidance and support. Contact us today at (410) 497-5947 or schedule a consultation.
