Key highlights for the 2025 U.S. tax year (returns filed in 2026) that individuals and businesses should be aware of:
📊 Standard Deductions & Brackets
Standard deduction increases help reduce taxable income:
• $15,000 for single filers
• $30,000 for married filing jointly
• $22,500 for heads of household
(These are inflation-adjusted increases from 2024.)
📈 Retirement & Savings Limits
401(k) contribution limit rises to $23,500 for 2025.
Catch-up limits for those aged 50+ remain available, and special higher catch-up amounts apply for ages 60–63.
IRA limits stay at $7,000 with an additional $1,000 catch-up for age 50+ in 2025.
💰 Tax Credits & Incentives
Earned Income Tax Credit (EITC) increases for low- and moderate-income workers, with the maximum credit rising (especially for families).
Some energy and vehicle tax credits are phasing out or ending in 2025 (e.g., EV and residential clean energy credits).
💳 Reporting & Threshold Updates
1099-K reporting threshold reset to $20,000 and 200 transactions — this reduces the number of small sellers who receive the form but income still must be reported.
🏦 Other Key Changes
Gift tax annual exclusion increases to $19,000 per recipient.
Alternative Minimum Tax (AMT) exemptions and thresholds are increased, potentially reducing AMT exposure for many taxpayers.
IRS Direct File and Free File programs are expanded to help more taxpayers file for free or directly through IRS tools.
🧾 Payroll and Withholding
For 2025, the IRS has confirmed no changes to payroll withholding tables or W-2/1099 forms related to the new tax law provisions — employers should continue using current reporting procedures.