The IRS has released the key tax numbers that are updated annually for inflation, including tax brackets, phaseouts, standard deduction, and contribution limits.  Due to rounding limitations, not all numbers have changed from last year, but tax bracket thresholds have increased by just under 2.8%.  The notices containing this information are available on the IRS website here and here.  Some notable callouts for those who don’t want to read all the way through the update:

• Max contributions to 401k, 403b, and 457 retirement accounts will increase by $500 to $23,500. The catch-up max remains at $7,500, if you’re at least age 50.  New this year, if you’re age 60-63, your max catch-up contribution is increased by 50% to $11,250.  That means the maximums by age are:
  • Under 50: $23,500
  • 50-59: $31,000
  • 60-63: $38,750
  • Over 63: $31,000
• Max contribution to a SIMPLE retirement account will increase by $500 to $16,500 (+$3,500 catch-up if you’re at least age 50 +$1750 additional catch-up if you’re 60-63).
• Max total contribution to most employer retirement plans (employee + employer contributions) increases from $69,000 to $70,000 (plus catch-ups noted above).
• Max contribution to an IRA remains at $7,000 (+$1,000 catch-up if you’re at least age 50).
• The phase out for being able to make a Roth IRA contribution is $246k (married) and $165k (single). Phase out begins at $236k (married) and $151k (single).
• The standard deduction increases by $800 to $30,000 (married) and by $400 to $15,000 (single) +$2000 if you’re at least age 65 and single or $1600 each if you’re married and at least 65.
• The personal exemption remains $0 (the Tax Cuts & Jobs Act eliminated the personal exemption in favor of a higher standard deduction and child tax credits).
• The child tax credit remains at pre-2021 rules at $2,000 per child, phasing out between $400-440k (married) and $200-220k (single).
• The maximum contribution to a Health Savings Account (HSA) will increase to $8,550 (married) and $4,300 (single).
• The annual gift tax exemption increases by $1,000 to $19,000 per giver per receiver.
• The lifetime gift / estate tax exemption increases to $13,990,000 (c’mon IRS, you couldn’t round up and make it easy?!?  Note that this will be reduced by 50% starting on 2026 if the TCJA expires as it is set to.  Another post on TCJA expiration is coming soon!
• Social Security benefits will rise 2.5% in 2025.  The wage base for Social Security taxes will rise to $176,100 in 2025 from $168,600.
• Updated mileage rates for 2025 are due out later this year.

You can find all of the key tax numbers, updated upon release, on the PWA website, under Resources.