Happy New Year!
As we kick off a new year, it’s time to turn our attention to the upcoming tax season.
This post is intended as a year-long resource, so keep it handy.
2025 Tax Planning Resources
Today, we discuss:
- 2025 key financial data, including tax brackets, retirement plan distribution limits, Medicare premiums, standard deductions, child tax credit, and more. (Summarized in an organized spreadsheet.)
- Changes in the IRS 2025 retirement contribution limits and a new “super” catch-up contribution for those aged 60-63.
- Using QCDs earlier in the year.
- The HSA’s triple tax benefits.
- Why income taxes “may” increase in 2026.
2025 Key Financial Data (Useful Spreadsheet)
Keep this spreadsheet (links to our website) handy throughout the year. (Updated post President Trump signing the One Big Beautiful Bill Act (OBBBA) on July 4, 2025.)
Within it, you’ll find 2025 tax brackets, retirement plan distribution limits, Medicare premiums, standard deductions, child tax and education credits, tax rates for long-term capital gains and qualified dividends, tax on Social Security benefits, and much more.
If you’d like a quality hard copy, let us know. We’re happy to mail one to you or feel free to stop in.
IRS 2025 Contribution Limit Changes & New “Super” Catch-Up Contribution
We encourage maximizing your retirement savings contributions. If you’re unsure how, reach out. Let’s explore strategies to increase your savings.
401(k), 403(b), 457, TSP & SIMPLE IRAs Limits:
General Limit: $23,500 (401(k), etc.)
General Limit SIMPLE IRA: $17,600 (< 26 employees) or $16,500 (> 26 employees)
Age 50+ Catch-Up: $7,500 most plans; $3,500 (SIMPLE IRAs)
Ages 60-63 “Super” Catch-Up: $11,250 most plans; $5,250 (SIMPLE IRAs)
Traditional & Roth IRAs:
General Limit: $7,000
Age 50+ Catch-Up: $1,000
Key Change: The “super” catch-up contribution allows individuals aged 60-63 to increase their retirement savings by contributing more (generally $11,250) to their employer-sponsored retirement plans.
Use QCDs Earlier in the Year
With a Qualified Charitable Distribution (QCD), you can transfer up to $100,000 directly from your IRA to a charity tax-free. It’s often beneficial to take your QCDs before your Required Minimum Distributions (RMDs), since it can lower your taxable income.
Here’s how it works:
RMD: Let’s say your RMD is $20,000.
Donation: You donate $3,000 to charities directly from your IRA.
Deduction: This $3,000 is deducted from your $20,000 RMD.
Taxable Amount: You only pay taxes on the remaining $17,000.
There are other benefits to using QCDs earlier in the year, including avoiding potential delays that can sometimes occur during the busy year-end season.
Also, if you have a charity in mind, making your QCD early in the year provides the charity with the funds sooner, putting your donation to work faster.
Important Note: When using Fidelity for a QCD, you won’t receive a tax form. To claim the tax deduction, you’ll need to inform your tax advisor.
At Windsor Wealth Management, we regularly facilitate QCDs for our clients, and we’re happy to engage with your accountant.
HSA: Triple Tax Benefits
Health Savings Accounts (HSAs), offer several tax benefits to help you save money on health care costs.
Keep in mind, HSAs are only available to individuals enrolled in a high-deductible health plan, have no other health care coverage, and are not enrolled in Medicare or claimed as a dependent.
Here are the triple tax benefits:
#1—Tax-Deductible Contributions: The money you contribute to an HSA is tax-deductible, meaning it reduces your taxable income, which can lead to tax savings in the present.
#2—Tax-Free Growth: Any investment earnings your HSA accumulates grow tax-free, allowing your savings to potentially build up more quickly over time.
#3—Tax-Free Withdrawals: When you use your HSA funds to pay for qualified medical expenses, such as doctor’s visits, prescription drugs or hospital stays, the withdrawals are tax-free.
Also, HSAs have no “use it or lose it” rule. The funds can roll over indefinitely from year to year. (Whereas, unused funds in a Flexible Spending Account (FSA) are typically forfeited at the end of the plan year.)
For 2025, HSA contribution limits are:
Self-only: $4,300
Family: $8,550
Individuals aged 55 and older can make an additional $1,000 catch-up contribution.
Income Taxes May Increase in 2026
The Tax Cuts and Jobs Act (TCJA) is a tax law passed in 2017 that made significant changes to the US tax code.
Many of the individual tax cuts under the TCJA are set to expire at the end of 2025. If Congress doesn’t extend these provisions, income tax rates for many Americans could increase starting in 2026.
Under the TCJA, marginal tax rates are 10%, 12%, 22%, 24%, 32%, 35% and 37%.
If the TCJA expires on 12/31/25, then marginal tax rates will revert to their permanent pre-TCJA levels of 10%, 15%, 25%, 28%, 33%, 35% and 39.6%, according to a Congressional Research Service report.
Want to see how the potential expiration of the TCJA might affect your taxes?
Our software can illustrate the potential tax implications of different income levels.
Contact us if you’d like to see how your tax burden could change under various circumstances.
Quick Look: 2024 Market Performance
In short, 2024 was a great year for the stock market, with the S&P 500 finishing up 25.02% for the year, and 3% in the last quarter.
Communication services and big tech led the way, consistently outperforming the rest of the market, largely due to the rise of artificial intelligence. Compared to 2023, there was broader market participation in 2024, with sectors beyond communication services and big tech contributing more evenly to the market’s growth.
Looking ahead to 2025, company valuations are high, so we may not see as strong a year.
Fidelity does a nice job recapping 2024 in their article, 2024 Stock Market Report. It’s an easy read too.
–David Bunker, Financial Advisor & Licensed Fiduciary
Before You Go
Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.
Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.
This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.
Bay Colony Advisors, DBA Windsor Wealth Management, is not a Certified Public Accountant and does not provide tax, legal, or accounting advice. Any tax-related information provided is for general informational purposes only and should not be construed as legal or tax advice. Each individual’s tax situation is unique, and you should consult with your own tax, financial, or legal advisors before making any decisions. We strongly recommend seeking the advice of a qualified CPA or other professional for personalized tax advice.