As we step into 2025, I wanted to take a moment to review the routine tax and contribution limit changes that come with the new year. This episode focuses on the updated limits for 401(k)s, IRAs, HSAs, and other retirement plans, along with key adjustments to Social Security, the annual gift tax exclusion, and standard deductions. For instance, the 401(k) elective deferral limit is now $23,500 for those under 50, with a special new catch-up contribution for those aged 60-63. While most changes align with inflation, they’re crucial to understand for effective tax planning. Though income tax rates remain stable this year, bracket thresholds and deductions have been adjusted. I also touch on planning tips, like updating recurring contributions to retirement accounts. This isn’t to be confused with anticipated broader tax reforms from the incoming administration, which I’ll cover in a separate episode. Thanks for tuning in, and here’s to staying tax-savvy in 2025!

Key Takeaways:

• The 401(k), 403(b), and TSP elective deferral limit for those under 50 is now $23,500. For those 50 and older, the catch-up contribution remains $7,500, allowing a total of $31,000.

• A catch-up provision allows individuals aged 60-63 in 2025 to make an additional catch-up contribution of $3,750, bringing their total potential contributions to $35,250.

• The annual contribution limit for IRAs remains unchanged at $7,000, with an additional $1,000 catch-up for those 50 and older.

• Health Savings Account (HSA) limits have increased to $4,300 for individuals and $8,850 for families, with a $1,000 catch-up contribution for those 55 and older.

• The annual gift tax exclusion has increased to $19,000 per person, up $1,000 from 2024.

• The lifetime exemption amount for 2025 is $13.99 million per person, up from $13.61 million in 2024.

Key Timestamps:

(00:00) - Introduction to 2025 Tax Changes

(00:50) - 401k and Retirement Plan Updates

(02:30) - IRA and HSA Contribution Limits

(03:31) - SEP IRA and Solo 401k Limits

(04:11) - Social Security and Gift Tax Adjustments

(06:04) - Income Tax Rates and Deductions

(07:11) - Capital Gains and QBI Adjustments

(07:47) - Conclusion and Final Thoughts

Key Topics Discussed:

BLUF Veteran Finance Podcast, Military Finance, Veteran Financial Planning, Military Money Management, VA Benefits, Military Retirement Planning, Financial Literacy for Soldiers, Military Budgeting Tips, Debt Management for Service Members, VA Loans, Military Investment Strategies, Saving for Deployment, Thrift Savings Plan (TSP), Transitioning to Civilian Life, Military Tax Benefits, Financial Independence for Veterans, Military Money Manual, The Military Money Show

More of Baskin Financial Planning:

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Questions or comments, drop me a note at: erik@baskinfp.com

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