2025 Tax News

We post updates and information here that may be beneficial to you.

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Standard Deduction

  • Single or MFS: $15,000 (+$400)
  • MFJ: $30,000 (+$800)
  • Head of Household: $22,500 (+$600)

Under the OBBB

Signed July 4, 2025

  • Raises standard deduction further to $15,750 (single/MFS), $31,500 (MFJ), $23,625 (HOH)
  • Adds a bonus $6,000 deduction for taxpayers 65+ (2025–2028)

Retirement Plan Adjustments

401(k), 403(b), 457(b)

  • Contribution limit raised to $23,500 (+$500)
  • Catch-up contribution (50+): still $7,500, except ages 60–63 – now $11,250 under SECURE 2.0

IRS’s

  • Contribution limit remains $7,000
  • Roth IRA income phase-out
    • Single/HOH: $150,000–$165,000
    • MFJ: $236,000–$246,000
  • Traditional IRA deduction phase-out (for workplace plan participants):
    • Single: $79,000–$89,000
    • MFJ: $126,000–$146,000

Other Key Adjustments

  • Qualified transportation fringe benefit: $325/month
  • Parking: $325/month
  • Health FSA contribution: $3,300 (carryover limit $660)
  • Annual gift exclusion: $19,000
  • Adoption credit: $17,280

Impact of the OBBBA

Major policy changes effective July 4, 2025 affect 2025 returns

  • Permanently extends 2017 tax-rate structure
  • Standard deduction and child tax credit increased
  • SALT cap raised to $40,000 for incomes under $500k
  • Introduces no-income-tax on tips, overtime deductions, car loan interest deduction, “Trump Accounts”, etc.
  • Removes some clean energy credits, but raises estate/gift exemptions and allows charitable deductions for non-itemizers

What You Should Do Next

Adjust tax withholding to optimize take-home pay with higher deductions/brackets.

Plan retirement contributions, especially catching up if you’re 60–63.

Check Roth/Traditional IRA eligibility—expanded phase-out ranges may help.

If aged 65+, prepare to claim the senior deduction bonus and itemized new deductions under OBBB.

Track SALT changes if you live in a high-tax state (KY may benefit).

Category

Standard Deduction – Single
MFJ
HOH
Child Tax Credit
SALT deduction cap
Tips/overtime/car loans

2025 Tax Year (filed 2026)

$15,000
$30,000
$22,500
$2,000 (set to expire)
$10,000
N/A

Post-OBBB Adjustments (from July 4)

$15,750 + $6,000 senior bonus
$31,500 + senior bonus
$23,625 + senior bonus
Permanently $2,200 per child
Raised to $40,000 for incomes < $500k
New deductions under OBBB