Explore the projected 2025 tax brackets and IRA contribution limits. Get ahead with our comprehensive guide to upcoming financial changes.
The 2025 tax brackets are projected to bring significant changes to IRA contribution limits and various tax thresholds. As we look ahead to the upcoming fiscal year, it’s crucial for individuals and businesses alike to understand these potential adjustments.
This post provides a comprehensive overview of the projected changes, helping you prepare for the financial landscape of 2025.

FAQs
Q1: What are the projected 2025 tax brackets?
A1: While the IRS hasn’t released official numbers, projections indicate that the top 37% income tax bracket threshold for married couples filing jointly may increase to $751,600, and for single filers to $626,350.
Q2: How will IRA contribution limits change in 2025?
A2: IRA contribution limits for 2025 are projected to remain at $7,000 for individuals under 50 and $8,000 for those 50 and older. However, income phaseout ranges for Roth IRA contributions are expected to increase slightly.
Q3: What updates are expected for estate planning in 2025?
A3: The estate planning landscape for 2025 is projected to see increases in key areas. The annual gift tax exclusion may rise to $19,000, and the estate tax applicable exclusion amount could increase to $13,990,000 plus any deceased spousal unused exclusion amount.
EVEN THOUGH THE IRS HASN’T RELEASED THE OFFICIAL NUMBERS YET WE’VE PROJECTED MANY OF THE KEY TAX FIGURES FOR 2025.
Standard DeductionThe standard deduction reduces taxable income, simplifying tax filing. Individuals can claim a deduction based on a set amount or a percentage of their earned income, whichever is greater. Additionally, there are extra deductions for individuals who are blind or aged 65 and older, with different amounts for singles/heads of household and all other filing statuses. These deductions help lower the overall tax liability by reducing the taxable income. | ||
2024 | Projected for 2025 | |
Married filing jointly | $29,200 | $30,000 |
Head of household | $21,900 | $22,500 |
Single | $14,600 | $15,000 |
Married filing separately | $14,600 | $15,000 |
Standard deduction for dependent | Greater of $1,300 or $450 + earned income | Greater of $1,350 or $450 + earned income |
Additional Standard Deduction For Blind Or Aged (65 Or Older) | ||
Single/Head of household | $1,950 | $2,000 |
All others | $1,550 | $1,600 |
Taxable Income Threshold For Top 37% Income Tax BracketThese thresholds are significant because they represent the income levels at which individuals or households begin to pay the highest tax rate. Changes in these thresholds over time can reflect economic conditions, such as inflation adjustments or economic growth. | ||
2024 | Projected for 2025 | |
Married filing jointly | $731,200 | $751,600 |
Head of household | $609,350 | $626,350 |
Single | $609,350 | $626,350 |
Married filing separately | $365,600 | $375,800 |
Long-Term Capital Gain 20% Threshold(Based On Taxable Income)The income thresholds for different filing statuses that determine when the 20% long-term capital gains tax rate applies. Long-term capital gains are profits from the sale of assets held for more than a year, and they are taxed at different rates depending on an individual’s taxable income. | ||
2024 | Projected for 2025 | |
Married filing jointly | $583,750 | $600,050 |
Head of household | $551,350 | $566,700 |
Single | $518,900 | $533,400 |
Married filing separately | $291,875 | $300,000 |
Alternative Minimum Tax (AMT)The AMT is a parallel tax system designed to ensure that high-income individuals pay a minimum amount of tax, regardless of deductions or credits they might claim under the regular tax system. The income thresholds at which these exemptions begin to phase out, meaning taxpayers with incomes above these thresholds will see their exemptions reduced. | ||
2024 | Projected for 2025 | |
Maximum AMT exemption amount | ||
Married filing jointly | $133,300 | $137,000 |
Single/Head of household | $85,700 | $88,100 |
Married filing separately | $66,650 | $68,500 |
Exemption phaseout threshold | ||
Married filing jointly | $1,218,700 | $1,252,700 |
Single/Head of household | $609,350 | $626,350 |
Married filing separately | $609,350 | $626,350 |
26% on AMTI* up to amount, 28% on AMTI above amount | ||
Married filing separately | $116,300 | $119,550 |
All others | $232,600 | $239,100 |
*Alternative minimum taxable income
Kiddie Tax: Child’s Unearned Income“Kiddie tax”, refers to a tax regulation affecting children’s unearned income, such as interest, dividends, and capital gains. This tax was implemented to prevent families from transferring investments to children to take advantage of their typically lower tax rates. | ||
2024 | Projected for 2025 | |
Above this amount taxed using parents’ tax rates | $2,600 | $2,700 |
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Estate PlanningKey information about estate planning, which is essential for managing and distributing a person’s assets during their lifetime and after death. Tax rates and exclusion amounts are crucial for understanding how much wealth can be transferred without incurring taxes. This is important for preserving wealth and maximizing inheritance for beneficiaries. | ||
2024 | Projected for 2025 | |
Top gift, estate, and generation-skipping transfer (GST) tax rate | 40% | 40% |
Annual gift tax exclusion | $18,000 | $19,000 |
Noncitizen spouse annual gift tax exclusion | $185,000 | $190,000 |
Gift tax and estate tax applicable exclusion amount | $13,610,0001 + DSUEA2 | $13,990,0001 + DSUEA2 |
GST tax exemption | $13,610,000 | $13,990,000 |
1Basic exclusion amount
2Deceased spousal unused exclusion amount
Stay Informed And Plan Ahead For 2025
As we approach 2025, understanding the projected changes in tax brackets, IRA contribution limits, and estate planning thresholds is crucial for effective financial planning. While these projections provide valuable insights, it’s important to remember that official figures may vary. By staying ahead of the curve, you can better position yourself for financial success in the coming year.
Contact your tax and financial advisors to determine the best moves for your situation.