With the changes happening in Washington D.C., there is now some uncertainty about what tax policies we may see in 2025 and beyond. During this time of uncertainty, it is challenging to create a workable tax plan. However, there are several things that we DO know about tax changes to start 2025. Here are the key highlights as they are currently known.
The seven tax rates remain unchanged, with a 2.8% increase in income thresholds, allowing more income to be taxed at lower rates.
The 401(k) contribution limit rises to $23,500. Catch-up contributions remain at $7,500 for those aged 50-59 and 64+, while individuals aged 60-63 can contribute an additional $11,250. IRA contribution limits stay at $7,000, with a $1,000 catch-up for those over 50.
Starting January 1, 2025, new IRS rules require brokers, exchanges, and payment processors to report digital asset sales and exchanges. Transactions will be summarized annually on the new Form 1099-DA, similar to stock and bond reporting. Stay vigilant in tracking your crypto activity for compliance.
The threshold for third-party payment processors to report transactions is set to decrease from $5,000 in 2024 to $2,500 in 2025, and further to $600 in 2026.
Many individual tax provisions from the 2017 TCJA are scheduled to expire at the end of 2025, potentially affecting income tax rates, standard deductions, and the child tax credit.
Contact us today to stay informed and help navigate these evolving tax landscapes.
Empowering business owners and individuals in South Jersey and Philadelphia to feel confident through proactive accounting and advisory solutions.
