Important Tax Figures for 2025
Key Federal Tax Figures for 2025
As expected with the current inflationary environment, the Internal Revenue Service has announced adjustments to key tax figures for 2025, affecting aspects like estate tax exemptions, contribution limits, and deductions. These tables summarize the changes compared to 2024.
Please note that this information is for informational purposes only and should not be construed as tax advice. Consult with a qualified Brady Ware tax professional for guidance specific to your circumstances.
| Social Security/ Medicare | 2025 | 2024 |
| Social Security Tax Wage Base | $176,100 | $168,600 |
| Medicare Tax Wage Base | No limit | No limit |
| Employee portion of Social Security | 6.20% | 6.20% |
| Employee portion of Medicare | 1.45% | 1.45% |
| Individual Retirement Accounts | 2025 | 2024 |
| Roth IRA Individual, up to 100% of earned income | $7,000 | $7,000 |
| Traditional IRA Individual, up to 100% of earned Income | $7,000 | $7,000 |
| Roth and traditional IRA additional annual "catch-up" contributions for account owners age 50 and older | $1,000 | $1,000 |
| Qualified Plan Limits | 2025 | 2024 |
| Defined Contribution Plan limit on additions (Sections 415(c)(1)(A)) | $70,000 | $69,000 |
| Defined Benefit Plan limit on benefits (Section 415(b)(1)(A)) | $280,000 | $275,000 |
| Maximum compensation used to determine contributions | $350,000 | $345,000 |
| 401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2)) | $23,500 | $23,000 |
| 401(k), 403(b), 457 & SARSEP additional "catch-up" contributions for employees age 50 and older | $7,500 | $7,500 |
| SIMPLE deferrals (Section 408(p)(2)(A)) | $16,500 | $16,000 |
| SIMPLE additional "catch-up" contributions for employees age 50 and older | $3,500 | $3,500 |
| Compensation defining highly compensated employee (Section 414(q)(1)(B)) | $160,000 | $155,000 |
| Compensation defining key employee (officer) in a top-heavy plan | $230,000 | $220,000 |
| Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c)) | $750 | $750 |
| Driving Deductions | 2025 | 2024 |
| Business mileage, per mile | 70 cents | 67 cents |
| Charitable mileage, per mile | 14 cents (the rate is set by statute) | 14 cents (the rate is set by statute) |
| Medical and eligible moving*, per mile | 21 cents | 21 cents |
| Business Equipment | 2025 | 2024 |
| Maximum Section 179 deduction | $1.25 million | $1.22 million |
| Phase out for Section 179 | $3.13 million | $3.05 million |
| Business Meals | 2025 | 2024 |
| General deduction for eligible business-related food and beverage expenses | 50% | 50% |
| Transportation Fringe Benefit Exclusion | 2025 | 2024 |
| Monthly commuter highway vehicle and transit pass | $325 | $315 |
| Monthly qualified parking | $325 | $315 |
| Standard Deduction | 2025 | 2024 |
| Married filing jointly | $30,000 | $29,200 |
| Single (and married filing separately) | $15,000 | $14,600 |
| Heads of Household | $22,500 | $21,900 |
| Domestic Employees | 2025 | 2024 |
| Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. | $2,800 | $2,700 |
| Kiddie Tax | 2025 | 2024 |
| Amount used to reduce the net unearned income reported on a child's return that's subject to the Kiddie Tax | $1,350 | $1,300 |
| Estate Tax | 2025 | 2024 |
| Federal estate tax exemption | $13.99 million | $13.61 million |
| Maximum estate tax rate | 40% | 40% |
| Annual Gift Exclusion | 2025 | 2024 |
| Amount you can give each recipient | $19,000 | $18,000 |
| Alternative Minimum Tax Exemption | 2025 | 2024 |
| Married Filing Jointly | $137,000 and begins to phase out at $1,252,700 | $133,300 and begins to phase out at $1,218,700 |
| Single | $88,100 and begins to phase out at $626,350 | $85,700 and begins to phase out at $609,350 |
* Only available for active-duty members of the military
Disclaimer: This article provides general information and should not be considered professional financial or tax advice. Please consult with a qualified CPA or financial advisor for guidance specific to your individual business needs.
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Kristin specializes in tax services, particularly for pass-through entities and complex individual matters. Her clients span industries like dealerships, real estate, wholesaling, and professional services. Her approach goes beyond compliance, addressing clients’ pain points with a genuine care that ensures understanding, compliance, and strategic insights.