Year-End Strategies-Handout #3 - Tax Facts at a Glance

Handout #3 - Tax Facts at a Glance

Pdf Summary

The document summarizes key U.S. federal tax information for 2025, including updated tax rate schedules, deductions, credits, retirement plan limits, and Social Security details, with comparisons to 2024.

<strong>2025 Income Tax Rates:</strong>  
For Married Filing Jointly, tax brackets start at 10% for income up to $23,850, scaling up to 37% for incomes over $751,600. Single filers have tax brackets from 10% up to incomes of $11,925, with the top 37% rate starting over $626,350. Estates and trusts have separate brackets, starting at 10% and tops out at 37% above $15,650.

<strong>Major 2025 Tax Changes under the One Big Beautiful Bill Act (OBBBA):</strong>  
- State and Local Tax (SALT) deduction capped at $40,000 for singles under $250,000 MAGI and joint filers under $500,000 MAGI, phasing down to $10,000 floor over thresholds.  
- New deductions introduced for U.S. auto loan interest (up to $10,000), qualified overtime compensation, and qualified tips with phase-outs based on modified adjusted gross income (MAGI).  
- Trump Accounts: $1,000 government funding for children born 2025-2028.  
- Corporate tax remains at 21% of taxable income.  
- Qualified business income deduction thresholds increased.

<strong>Other 2025 Highlights:</strong>  
- Standard deduction increases to $31,500 for married filing jointly, $15,750 for singles.  
- Child Tax Credit is $2,200 per child under 17, phasing out above $400,000 joint MAGI.  
- Capital gains tax rates remain 0%, 15%, or 20% depending on income thresholds.  
- Estate and gift tax exemptions rise slightly to $13.99 million with a 40% rate.  
- Retirement plan contribution and catch-up limits increase (e.g., 401(k) employee deferral at $23,500).  
- Social Security full retirement age varies by birth year, max monthly benefit is $4,018; earnings limits for benefit withholding and maximum taxable compensation ($176,100 for OASDI) are updated.

Additional detailed phase-out ranges for IRA contributions, required minimum distribution factors, and other tax provisions are included, reflecting 2025 inflation adjustments. Taxpayers are advised to consult personal advisors as these figures are subject to change.

Keywords

2025 U.S. federal tax rates

Married filing jointly tax brackets

Single filer tax brackets

One Big Beautiful Bill Act (OBBBA)

State and Local Tax (SALT) deduction cap

U.S. auto loan interest deduction

Trump Accounts funding

Child Tax Credit 2025

Retirement plan contribution limits

Social Security 2025 updates