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:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

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

www.baskinfp.com/post/60

In this episode, I tackle key questions about estate tax and gifting strategies, highlighting the importance of proactive planning to pass wealth to future generations. Annual gifting is one of the simplest ways to remove money from your taxable estate without reducing your lifetime exemption per spouse. I clear up common misconceptions, such as the belief that gifts over $18,000 are taxable (they aren’t; they simply require reporting and reduce your lifetime exemption) and that recipients of gifts or inheritances owe taxes (they generally do not). I also discuss exceptions, like direct payments for educational or medical expenses, which don’t count toward gift limits and can be powerful tools for gifting. I wrap up by encouraging you to start thinking about your legacy and taking action now, especially if you’re a business owner or high-income earner. Tax laws can always change, so staying proactive now can help protect your family and create a lasting impact. Thanks for listening, and I’ll see you next year!

Key Takeaways:

• Be sure to keep track of and report your untaxed gifts. This is important to ensure they don’t end up counting against your lifetime exemption.

• Always get up to date with your state and local laws, and know how they interact with federal regulations.

• Wealth can come faster than you think. High earners in their 30s and 40s may end up surprised, and should keep an active plan for themselves and their heirs.

• Legislation changes. Wealth transfers are favored today, but the law may not always read that way. Active planning will help you leave something behind.

Key Timestamps:

(00:00) - Understanding Estate Tax and Annual Gifting

(01:03) - Historical Context of Estate Tax Exemptions

(02:00) - Current Estate Tax Exemptions and Future Considerations

(03:50) - Annual Gift Tax Exclusion Explained

(08:08) - Misconceptions and Reporting Requirements

(10:30) - Exceptions to Gift Limits

(11:45) - Conclusion and Final Thoughts

(13:16) - Closing Remarks and Resources

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, Estate Planning, Wealth Transfer, Estate Tax, Gift, Financial Gifts, Tax Write Off

Mentions:

• IRS Form 709: https://www.irs.gov/forms-pubs/about-form-709

• State Estate Taxes: https://taxfoundation.org/data/all/state/estate-inheritance-taxes/

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

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

www.baskinfp.com/post/59

Erik discusses how the recent election win by Donald Trump and the Republican party could potentially impact your financial portfolio. Erik highlights three main areas of concern: financial markets and investments, interest rates, and taxes. The discussion covers possible inflationary effects, changes in financial market dynamics, expected volatility in interest rates, and potential tax code modifications. Erik emphasizes the importance of staying invested, monitoring interest rates, and understanding the likely changes in tax policies to make informed financial decisions in the coming years.

Key Takeaways:

• How will a Trump and Republican win affect financial markets and investments?

• What are the potential impacts on interest rates due to proposed policies and economic conditions?

• How might taxes change under a Republican majority, and what should individuals consider for tax planning?

Key Timestamps:

(00:00) - Introduction: Impact of Trump's Win on Finances

(01:23) - Financial Markets and Investments

(05:15) - Interest Rates and Their Implications

(08:11) - Tax Changes and Planning

(13:39) - Download the Ultimate Military Finance Checklist

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:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

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

www.baskinfp.com/post/#5