2025 Tax Law Changes — What You Need to Know

2025 TAX LAW CHANGES

Here is a breakdown of the most important tax updates taking effect for the 2025 tax year. These changes can impact your withholding, deductions, credits, and how you plan financially for the year ahead.

STANDARD DEDUCTION INCREASE

• Single: $15,300
• Married Filing Jointly: $30,600
• Head of Household: $22,950
• This helps lower taxable income for most taxpayers.

INCOME TAX BRACKET ADJUSTMENTS

The IRS raised income tax bracket thresholds due to inflation, which may reduce your tax liability even if your income increased. Most taxpayers will see slightly lower effective tax rates.

CHILD TAX CREDIT CHANGES

• Up to $2,000 per qualifying child
• Up to $1,700 refundable for eligible taxpayers
• Income phase-out thresholds have been adjusted upward for inflation.

RETIREMENT CONTRIBUTION LIMITS

• 401(k)/403(b)/457: $23,000
• Catch-up (age 50+): $7,500
• IRA: $7,500
• IRA Catch-up (50+): $1,000 (remains unchanged)
• Higher limits allow more tax-deferred savings.

HEALTH SAVINGS ACCOUNT (HSA) CHANGES

• Individual coverage: $4,300
• Family coverage: $8,550
• Catch-up (55+): $1,000
• Eligibility rules remain unchanged.

BUSINESS & SELF-EMPLOYMENT UPDATES

• Mileage rate for business driving increased to 68.0¢ per mile.
• Section 179 Expensing Limit: $1.25 million.
• Bonus depreciation remains at 60% for 2025 (scheduled phase-out).
• Qualified Business Income (QBI) deduction still available for eligible pass-through entities.

ENERGY & HOME IMPROVEMENT CREDITS

• Federal energy efficiency credits continue with updated limits.
• Maximum annual credit remains up to 30% of eligible improvements.
• Clean vehicle credit rules remain unchanged.

IRS DIGITAL SERVICES EXPANSION

• View transcripts
• Track balances
• Set up payment plans
• View notices
• Identity verification through ID.me

WHAT TAXPAYERS SHOULD DO NOW

• Review withholding for 2025
• Update estimated tax payments if needed
• Organize deductions early
• Track mileage and business expenses
• Save documentation for energy credits

If you have questions about how these changes affect you, give our office a call at 706-677-2700 — we're here to help!

See tax preparation services or send documents securely.

A quick action plan for 2026 filers

• Update your W-4/G-4 for 2026 if your income changed in late 2025.
• Adjust estimated taxes for Q1 2026 using the new brackets and standard deduction.
• Increase retirement and HSA contributions early to maximize annual limits.
• Track energy/home upgrades with invoices so credits are easy to claim.