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Important Tax Law Changes for 2025

  1. Standard Deduction Increase:

    • The Standard Deduction has increased by 5% for 2025:
      • Single Filers: $14,600
      • Married Filing Jointly: $29,200
      • Head of Household: $21,900
    • This adjustment aims to keep pace with inflation, potentially reducing taxable income for many taxpayers.
  2. Tax Bracket Adjustments:

    • The IRS has adjusted tax brackets to account for inflation, affecting the rates at which income is taxed.
    • These changes may impact the amount of tax owed, depending on your income level.
  3. Retirement Contribution Limits:

    • Contribution limits for retirement accounts like 401(k)s and IRAs have been increased, allowing taxpayers to save more for retirement on a tax-deferred basis.
  4. Health Savings Account (HSA) Limits:

    • The annual contribution limits for HSAs have been raised, enabling individuals with high-deductible health plans to save more pre-tax dollars for medical expenses.
  5. Earned Income Tax Credit (EITC) Expansion:

    • The EITC has been expanded to provide greater benefits to low- and moderate-income working individuals and families.
  6. Child Tax Credit (CTC) Adjustments:

    • The CTC has been adjusted, potentially increasing the credit amount or modifying eligibility criteria.
  7. Capital Gains Tax Rates:

    • Changes have been made to capital gains tax rates, which may affect the taxation of investment income.
  8. Tax Credits for Energy-Efficient Home Improvements:

    • New tax credits are available for taxpayers who make energy-efficient improvements to their homes, such as installing solar panels or energy-efficient windows.
  9. Student Loan Interest Deduction:

    • The deduction for student loan interest has been modified, potentially affecting the amount of interest that can be deducted from taxable income.
  10. State and Local Tax (SALT) Deduction Cap:

    • The cap on the SALT deduction has been adjusted, impacting taxpayers who itemize deductions and pay significant state and local taxes.

Important Tax Dates 2025

2025 Filing Dates

  • January 15, 2025: Final estimated tax payment for 2024 due.
  • January 27, 2025: IRS begins processing 2024 tax returns.
  • February 1, 2025: Most tax preparation services, including AARP Tax-Aide, begin operations.
  • April 15, 2025: Filing deadline for 2024 taxes; first estimated tax payment for 2025 due.
  • June 16, 2025: Second estimated tax payment for 2025 due.
  • September 15, 2025: Third estimated tax payment for 2025 due.
  • October 15, 2025: Extended deadline to file 2024 tax returns.
  • January 15, 2026: Fourth estimated tax payment for 2025 due.
  • *Note: If any of these dates fall on a weekend or federal holiday, the deadline typically shifts to the next business day.

2025 Federal Legal Holidays

  • January 1, 2025: New Year’s Day
  • January 20, 2025: Birthday of Martin Luther King, Jr.
  • February 17, 2025: Washington’s Birthday (Presidents’ Day)
  • May 26, 2025: Memorial Day
  • June 19, 2025: Juneteenth National Independence Day
  • July 4, 2025: Independence Day
  • September 1, 2025: Labor Day
  • October 13, 2025: Columbus Day
  • November 11, 2025: Veterans Day
  • November 27, 2025: Thanksgiving Day
  • December 25, 2025: Christmas Day