Stay on top of the cost-of-living changes from the IRS and other federal agencies with this guide.
Every year, federal agencies like the Internal Revenue Service and Social Security Administration assess the impact of inflation and the current environment on their areas of oversight. Often, this results in cost-of-living adjustments (COLA), which may change tax thresholds, retirement contribution limits and other tax-advantaged plans that are inflation-adjusted by law.
To help you plan, here are key 2025 adjustments that could affect how you save, spend and invest. As you review these numbers, we are available to discuss your financial strategy and any potential adjustments to consider.
In this article:
- Tax inflation adjustments
- Retirement contribution limits
- Income phase-out ranges for Roth and traditional IRAs
- Health care account contribution limits
- Qualified charitable distribution (QCD) amounts
- Social Security
- Questions to discuss with us
Tax inflation adjustments
Income tax brackets – for taxable income in 2024
|
Tax bracket
|
Single
|
Married filing jointly
|
Head of household
|
Married filing separately
|
|
10%
|
$0–$11,600
|
$0–$23,200
|
$0–$16,550
|
$0–$11,600
|
|
12%
|
$11,600–
$47,150
|
$23,200–
$94,300
|
$16,550–
$63,100
|
$11,600–
$47,150
|
|
22%
|
$47,150–
$100,525
|
$94,300–
$201,050
|
$63,100–
$100,500
|
$47,150–
$100,525
|
|
24%
|
$100,525– $191,950
|
$201,050–$383,900
|
$100,500–$191,950
|
$100,525–
$191,950
|
|
32%
|
$191,950–$243,725
|
$383,900–$487,450
|
$191,950–$243,700
|
$191,950–$243,725
|
|
35%
|
$243,725–$609,350
|
$487,450–$731,200
|
$243,700–$609,350
|
$243,725–$365,600
|
|
37%
|
$609,350+
|
$731,200+
|
$609,350+
|
$365,600
|
Income tax brackets – for taxable income in 2025
|
Tax bracket
|
Single
|
Married filing jointly
|
Head of household
|
Married filing separately
|
|
10%
|
$0–$11,925
|
$0–$23,850
|
$0–$17,000
|
$0–$11,925
|
|
12%
|
$11,925–
$48,475
|
$23,850–
$96,950
|
$17,000–
$64,850
|
$11,925–
$48,475
|
|
22%
|
$48,475–
$103,350
|
$96,950–
$206,700
|
$64,850–
$103,350
|
$48,475–
$103,350
|
|
24%
|
$103,350– $197,300
|
$206,700–$394,600
|
$103,350–$197,300
|
$103,350–
$197,300
|
|
32%
|
$197,300–$250,525
|
$394,600–$501,050
|
$197,300–$250,500
|
$197,300–$250,525
|
|
35%
|
$250,525–$626,350
|
$501,050–$751,600
|
$250,500–$626,350
|
$250,525–$375,800
|
|
37%
|
$626,350+
|
$751,600+
|
$626,350+
|
$375,800+
|
General standard deduction
|
Filing status
|
2024
|
2025
|
|
Single
|
$14,600
|
$15,000
|
|
Married filing jointly
|
$29,200
|
$30,000
|
|
Head of household
|
$21,900
|
$22,500
|
|
Married filing separately
|
$14,600
|
$15,000
|
You may be eligible for an additional amount if you are 65 or older or blind.
Lifetime gift and estate tax exclusion
|
2024
|
2025
|
|
$13.61 million
|
$13.99 million
|
Annual gift tax exclusion*
|
2024
|
2025
|
|
$18,000
|
$19,000
|
*Per donee, per year.
Retirement contribution limits
401(k), 403(b), 457 and Thrift Savings Plans
|
|
2024
|
2025
|
|
Elective deferral limit
|
$23,000
|
$23,500
|
|
Catch-up amount for employees ages 50+
|
$7,500
|
$7,500 (no change)
|
|
Catch-up amount for employees ages 60-63*
|
Not applicable
|
$11,250
|
*SECURE Act 2.0 increased the catch-up contribution limit for individuals ages 60-63, beginning in 2025.
SIMPLE retirement plans
|
|
2024
|
2025
|
|
Elective deferral limit
|
$16,000
|
$16,500
|
|
Catch-up amount for individuals ages 50+
|
$3,500
|
$3,500 (no change)
|
|
Catch-up amount for employees ages 60-63*
|
Not applicable
|
$5,250
|
*SECURE Act 2.0 increased the catch-up contribution limit for individuals ages 60-63, beginning in 2025.
IRAs (traditional IRAs and Roth IRAs)
The below limits are the total contribution amounts you can make to any IRA (traditional or Roth).
|
|
2024
|
2025
|
|
Individuals
|
$7,000
|
$7,000 (no change)
|
|
Catch-up amount for individuals ages 50+
|
$1,000
|
$1,000 (no change)
|
Income phase-out ranges for Roth and traditional IRAs
The following are the modified adjusted gross income (MAGI) phase-out ranges for Roth IRAs and traditional IRAs.
MAGI phase-out range – for making contributions to Roth IRAs
|
|
2024
|
2025
|
|
Single/head of household
|
$146,000–$161,000
|
$150,000–$165,000
|
|
Married couple filing jointly
|
$230,000–$240,000
|
$236,000–$246,000
|
|
Married individual filing a separate return who makes contributions to a Roth IRA
|
$0–$10,000
|
$0–$10,000*
|
*Not subject to an annual cost-of-living adjustment.
MAGI phase-out range – for making deductible contributions to Traditional IRAs, if covered by a plan at work
|
|
2024
|
2025
|
|
Single/head of household
|
$77,000–$87,000
|
$79,000–$89,000
|
|
Married couple filing jointly
|
$123,000–$143,000
|
$126,000–$146,000
|
|
Individual not covered by a workplace retirement plan but is married to someone who is covered
|
$230,000–$240,000
|
$236,000–$246,000
|
|
Married individual filing a separate return who is covered by a workplace retirement plan
|
$0–$10,000
|
$0–$10,000*
|
*Not subject to an annual cost-of-living adjustment.
Health care account contribution limits
Health savings accounts (HSA)
|
|
2024
|
2025
|
|
Individual
|
$4,150
|
$4,300
|
|
Family
|
$8,300
|
$8,550
|
|
Catch up (for those 55+)
|
$1,000*
|
$1,000*
|
*Not subject to an annual cost-of-living adjustment.
Health care flexible spending accounts (FSA)
|
|
2024
|
2025
|
|
Maximum
|
$3,200
|
$3,300
|
|
Carryover maximum
|
$640
|
$660
|
Qualified charitable distribution (QCD) amounts
|
|
2024
|
2025
|
|
Regular limit
|
$105,000
|
$108,000
|
Social Security
Social Security COLA benefit increase
Maximum earnings subject to the Social Security tax
|
2024
|
2025
|
|
$168,600
|
$176,100
|
Earnings limitations for retirees
Some retirees who have begun to collect Social Security retirement benefits choose to continue working. Individuals who are younger than full retirement age, collecting Social Security retirement benefits and are continuing to work, will have some or all their Social Security benefits reduced if they earn more than certain dollar amounts.1
|
|
2024
|
2025
|
|
Earnings limit for workers who are younger than full retirement age (benefits reduced $1 for each $2 over the earnings limit)
|
$22,320
|
$23,400
|
|
Earnings limit for people in the year they reach their full retirement age, but before the month of full retirement age (benefits reduced $1 for each $3 over the earnings limit)
|
$59,520
|
$62,160
|
How might these numbers affect your financial strategy?
We can walk you through how to take advantage of these tax adjustments considering your financial goals.