As you prepare your return this tax season, here’s a quick review of some of the tax changes you’ll see from tax year 2024 to tax year 2025 as a result of inflation adjustments and new tax laws.
| Provision | 2025 | 2024 | +/- |
| Business equipment Sec. 179 expensing deduction | $2,500,000 | $1,220,000 | +$1,280,000 |
| Total purchase limit for full Sec. 179 expensing deduction | $4,000,000 | $3,050,000 | +$950,000 |
| Standard mileage rate: Business | 70.0¢ per mile | 67.0¢ per mile | +3.0¢ |
| Standard mileage rate: Medical/moving | 21.0¢ per mile | 21.0¢ per mile | N/C |
| Mileage rate: Charitable activity | 14.0¢ per mile | 14.0¢ per mile | N/C |
| Maximum wages subject to Social Security tax | $176,100 | $168,600 | +$7,500 |
| Social Security earnings limit | |||
| – Under full retirement age | $23,400 | $22,320 | +$1,080 |
| – Full retirement age | No limit | No limit | N/C |
| Top estate tax rate | 40% | 40% | N/C |
| Estate tax exemption | $13,990,000 | $13,610,000 | +$380,000 |
| Annual gift tax exclusion (per donee) | $19,000 | $18,000 | +$1,000 |
| Alternative minimum tax exemption | |||
| – Single, Head of Household | $88,100 | $85,700 | +$2,400 |
| – Married, joint | $137,000 | $133,300 | +$3,700 |
| – Married, separate | $68,500 | $66,650 | +$1,850 |
| Maximum retirement plan contributions | |||
| – IRA for those under age 50 | $7,000 | $7,000 | N/C |
| – IRA for those 50 and over | $8,000 | $8,000 | N/C |
| – SIMPLE plan for those under age 50 | $16,500 | $16,000 | +$500 |
| – SIMPLE plan for those 50 and over | $20,000 | $19,500 | +$500 |
| – 401(k) plan for those under age 50 | $23,500 | $23,000 | +$500 |
| – 401(k) plan for those 50 and over | $31,000 | $30,500 | +$500 |
| HSA contribution limits | |||
| – Self only | $4,300 | $4,150 | +$150 |
| – Family | $8,550 | $8,300 | +$250 |
| – Additional for 55 & older | $1,000 | $1,000 | N/C |
| “Kiddie tax” threshold | $2,700 | $2,600 | +$100 |
| “Nanny tax” threshold | $2,800 | $2,700 | +$100 |
| Education savings account contribution (Coverdell) | $2,000 | $2,000 | N/C |
| American opportunity (Hope) credit limit | $2,500 | $2,500 | N/C |
| Education loan interest deduction | $2,500 | $2,500 | N/C |
| Personal exemption (suspended through 2025) | Suspended | Suspended | N/A |
| FICA & self-employment tax | |||
| Taxable wages for Social Security/Medicare | Up to $176,100 | Up to $168,600 | +$7,500 |
| Social Security/Medicare tax rate | |||
| – Employees | 7.65% | 7.65% | N/C |
| – Employers | 7.65% | 7.65% | N/C |
| – Self-employed | 15.3% | 15.3% | N/C |
| Standard Deduction | |||
| – Single | $15,750 | $14,600 | +$1,150 |
| – Joint returns & surviving spouses | $31,500 | $29,200 | +$2,300 |
| – Married filing separately | $15,750 | $14,600 | +$1,150 |
| – Head of household | $22,625 | $21,900 | +$725 |
| – Additional for elderly or blind (married) | $1,600 | $1,550 | +$50 |
| – Additional for elderly or blind (single | $2,000 | $1,950 | +$50 |
NEW! 2025 – 2028 Additional (65+ deduction) $6,000 ($12,000 if filing joint)
Note: the benefit phases out when qualified income exceeds $75,000 single or $150,000 joint.
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