More than 150 million individual tax returns are filed each year in the U.S., according to the IRS, yet many taxpayers miss out on opportunities to reduce their tax burden or save for the future. The key? Staying informed about annual changes to tax laws and making proactive financial decisions.
This year brings several updates—including inflation adjustments, increased contribution limits, and new provisions under SECURE Act 2.0—that could impact your taxes and long-term financial planning. In this blog, we’ll break down what you need to know as you file your 2024 return and plan ahead for 2025.
Important Changes for Filing Your 2024 Taxes
For 2024, the IRS provided inflationary adjustments that increased the standard deduction for single filers to $14,600 in 2024 from $13,850 in 2023 and the married filing joint standard deduction to $29,200 in 2024 from $27,700 in 2023. They also provided a tax inflation adjustment to the marginal tax rates (see below).
Notable IRS Updates for 2025
As you plan for 2025, here are a few notable IRS updates to consider:
IRA and Roth IRA Contribution Limits:
Remain unchanged at $7,000 annually.
401(k) Contribution Limits:
Increased to $23,500 annually.
Catch-up contributions for individuals aged 50 and over:
$1,000 for IRAs and Roth IRAs.
$7,500 for 401(k)s.
New ‘super catch-up’ provision (SECURE Act 2.0):
Individuals aged 60 to 63 can contribute an additional $11,250 annually to their 401(k)s.
These updates present opportunities to maximize your retirement savings and adjust your financial strategy accordingly.
Why Proactive Planning Matters
Proactive tax and financial planning can benefit people in many ways including helping to reduce tax due while saving more for retirement, helping people receive larger healthcare premium tax credits, and reducing taxation in retirement by optimizing your withdrawal strategy. If you have questions about your unique situation and how we may be able to help you lower your taxes or plan your financial future, please reach out as we’d love to talk to you.
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