New Year, New You! Or, maybe not. Not everyone likes the idea that a new year requires a resolution for change. But, the IRS does, and one thing you can count on is a change to your taxes. Maybe the quote should be, “New Year, New Rules”.
Below are changes that affect most taxpayers.
Standard Deduction
Individual Tax Rates
Standard Mileage Rates
- Business miles: 70 cents per mile (up from .67 in 2024)
- Medical mile: 21 cents per mile (no change)
- Charity miles: 14 cents per mile (no change)
Retirement Contribution Limits
- 401(k) – $23,500 + $7,500 catch-up contribution for taxpayers age 50-59
- NEW – $11,250 catch-up contribution for taxpayers age 60-63
- IRA – $7,000 + $1,000 catch-up contribution for taxpayers over age 50
Child and Dependent Tax Credit
- Child under age 17 – $2,000
- Child age 17 or older and other dependents – $500
Gift and Estate Tax
The amount of a gift that can be excluded from gift tax for 2025 is $19,000 per individual, up $1,000 from 2024.
The estate tax exclusion is $13,990,000 for 2025, up from $13,610,000 in 2024.