Each year, the Internal Revenue Service makes a significant number of adjustments to key tax thresholds and other amounts meant to reflect the effects of inflation on U.S. taxpayers and government revenues.
Beyond recalibrating the basic income tax brackets and deduction amounts, the adjustments also set the maximum amounts that can be saved in different types of tax-deferred savings accounts — including 401(k)s, IRAs, health savings accounts, 529 college savings accounts and more.
Inflation continued to moderate in 2024, resulting in smaller but still meaningful increases for 2025 relative to prior years — particularly 2023.
The adjustments, once again, have also been affected by rules set by the Tax Cuts and Jobs Act of 2017, many parts of which are currently set to sunset at the end of 2025. What will happen with tax policies beyond that date is impossible to know at the moment, but the tax planning landscape is now firmly set for 2025.
See the slideshow for a review of 16 important tax policies all advisors (and clients) should know for the coming year.
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