2025 Tax Update

Tax rates change annually. These are the updates for 2024.

2025 income tax brackets

For individuals, taxable income over…

$1	10%
$11,925	12%
$48,475	22%
$103,350	24%
$191,300	32%
$250,525	35%
$626,350	37%

For married couples filing joint returns, taxable income over…

$1	10%
$23,850	12%
$96,950	22%
$206,700	24%
$394,600	32%
$501,050	35%
$751,600	37%

For heads of households, taxable income over…

$1	10%
$17,000	12%
$64,850	22%
$103,350	24%
$197,300	32%
$250,525	35%
$626,350	37%

2025 Standard Deduction

Filing as	Under 65	Age 65 +
Individuals	$15,000	$17,000*
Married filing joint	$30,000	$33,200**
Head of household	$22,500	$24,500*

* Single and age 65 plus, add $2,000.
**Each married person age 65 or over add $1,600.

2025 Long-term capital gains rates

#LTCG

For unmarried individuals, taxable income over…

$1	0%
$48,350	15%
$200,000	18.8%*
$518,900	23.8%*

For married individuals filing joint returns, taxable income over…

$1	0%
$96,700	15%
$250,000	18.8%*
$583,750	23.8%*

For heads of household, taxable income over…

$1	0%
$64,750	%15
$200,000	18.8%*
$551,350	23.8%*

*Includes 3.8% net investment income tax

2025 IRA contribution limits

#IRA

Under age 50	$7,000
Age 50 or over	$8,000

Traditional and Roth IRA contribution limits

Depending upon whether or not you and your spouse have a retirement plan at work, your IRA contribution may not be tax deductible and a Roth contribution might not be possible. Scroll down.

When do you have to take your required minimum distribution (RMD)?

2025 Traditional IRA deductible contribution income limits

#DEDUCTIBLE

Covered by a plan at work

Single or Head of Household…	….and your Modified AGI is…	…then you can take…
	$79,000 or less	full deduction
	in between	partial deduction
	$89,000 or more	no deduction
Married filing jointly or qualifying widower…	…and your Modified AGI is…	…then you can take…
	$126,000 or less	full deduction
	in between	partial deduction
	$146,000 or more	no deduction

Follow this chart if you do have a retirement plan at work

Not covered by a plan at work

Single, Head of Household or Qualifying Widower	Regardless of your income…	…you can take a full deduction
Married with a spouse who does not have a plan at work	Regardless of your income…	…you can take a full deduction
Married with a spouse who does have a plan at work …	…and your Modified AGI is…	…then you can take…
	$236,000 or less	full deduction
	in between	partial deduction
	$246,000 or more	no deduction

Follow this chart if you don’t have a retirement plan at work

2025 Roth IRA contribution income limits

#Roth

Roth IRA contributions, but not Roth conversions, are limited by income.

2024 income	Single	Married Filing Jointly
May make a full Roth contribution	$150,000 or less	$236,000 or less
Contribution gradually reduced	in between	in between
Not eligible	$165,000 or more	$246,000 or more

Maximum income for Roth contributions

2025 SEP and Simple IRA contribution limits

#SEP

SEP IRAs and Simple IRAs allow larger contributions than IRAs, but as discussed in the book, require rules to be followed.

SEP	$70,000
Simple	$16,500

The Simple IRA allows another $3,500 contribution if you are over age 50.

2025 401k contribution limits

#401K

Employee	$23,500
Max including employer	$70,000
Over age 50 “catch up” amount	$7,500
Highly-compensated employee, income above	$230,000

2025 estate tax and gift tax

#ESTATE

The estate tax exemption is:

Unmarried individuals	$13.99 million
Married couples	$27.98 million

These limits expire in 2026.

The annual gift tax exclusion is $19,000.

Charitable contributions

#charity

Donating to a Qualified Charity:

% of AGI for cash contributions	60%
% of AGI for appreciated assets	30%

People over age 70½ may use a Qualified Charitable Distribution, or QCD, to make a donation up to $100,000.

2025 Social Security and Medicare Taxes

#FICA

These are also called FICA taxes, or payroll taxes.

Maximum earnings subject to Social Security Tax (OASDI):	$168,600
OASDI tax rate	12.4%
Max earnings subject to Medicare tax	no cap
Medicare tax rate	2.9%

Self-employed people pay all of it: 15.3%. Or, for employees, the employee pay half, employers pay half.

Medicare surtax (IRMAA) in 2024

#IRMAA

IRMAA looks back two years. So for 2024, we look at year 2022 modified adjusted gross income above….

Single	MFJ	MF Separate	2022 Part B Premium	Part D surtax
$1	$1	$1	$174.70	$0
$103,000	$206,000	$97,000	$244.60	$12.90
$129,000	$258,000		$349.40	$33.30
$161,000	$322,000		$454.0	$53.80
$193,000	$386,000		$559.00	$74.20
$499,999	$749,999	$403,000	$594.00	$81.00

Income earned two years ago forces a monthly Medicare surtax for up to two years.

2025 HSA, HRA and FSA

#HSA

HSA

Health savings accounts

HSA annual contribution individual	$4,300
HSA annual contribution family	$8,550
HSA over age 55 catch-up	$1,000

QSEHRA

Small business HRA (health reimbursement arrangement):

QSEHRA annual contribution limit individual	$6,350
QSEHRA annual contribution limit family	$12,800

FSA

Flexible Spending Accounts

FSA contribution limit	$3,300
Dependent care FSA contribution limit	$5,000

To get a tax-deduction for an HSA contribution, then you must have a high deductible health insurance plan. Here are the minimum deductibles for 2025:

Min. HSA individual deductible	$1,650
Min. HSA family deductible	$3,300

Also, an HSA approved insurance plan must have a maximum out of pocket cost that does not exceed $8,300 or $16,100 for individuals and families.

Contact an AIWM Financial Planner

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