Key 2025 IRS Updates: What You Need to Know
From IRA contributions to Social Security COLAs and the standard deduction, several changes are headed our way. Get ready to make the most of them.


Each year, the IRS makes adjustments that affect taxes, retirement contributions and savings limits. Planning ahead can help you make the most of these changes.
Let’s dive into some key updates for 2025 — because who doesn’t enjoy crunching a few numbers?
401(k) and 403(b) contribution limits
Good news! In 2025, the employee contribution limit for 401(k) and 403(b) plans increases to $23,500 for those under 50 (up from $23,000 in 2024). Catch-up contributions for those 50 and older remain at $7,500, but if you’re 60-63 by the end of 2025, you can contribute an additional $11,250 as part of the SECURE 2.0 super 401(k) catch-up contribution.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Total 401(k) contribution limits
The combined employee and employer contribution limit is also going up in 2025. For those under 50, the cap increases from $69,000 to $70,000, and for those 50 and older, it rises to $77,500. If you’re 60-63, the total limit, including catch-up contributions, climbs to $81,250.
SEP IRA contribution limits
Contributing to a SEP IRA? The 2025 limit increases from $69,000 to $70,000.
Traditional and Roth IRA contribution limits
No changes here — contribution limits from traditional IRAs and Roth IRAs remain at $7,000 (or $8,000 for those eligible for catch-up contributions). Not the most exciting update, right?
HSA contribution limits
Health savings account (HSA) limits are increasing! In 2025, individuals can contribute up to $4,300 (up from $4,150), while families can contribute $8,550 (up from $8,300). The $1,000 catch-up for those 55 and older remains unchanged.
FSA contribution limits
Flexible spending accounts (FSAs), the "less fun sibling" of HSAs, see a modest increase from $3,200 in 2024 to $3,300 in 2025.
Social Security COLA increase
The cost-of-living adjustment (COLA) for Social Security benefits in 2025 is 2.5%. While it’s a smaller bump (due to lower inflation), it’s still an increase to be thankful for.
Social Security taxable income threshold
In 2025, Social Security tax applies to the first $176,100 of income, up from $168,600 in 2024.
Standard deduction increase
The standard deduction rises in 2025 to $15,000 for single filers (a $400 increase) and $30,000 for married couples filing jointly (an $800 increase).
Annual gift exclusion
The annual gift tax exclusion limit increases from $18,000 to $19,000 per recipient in 2025. Feel free to spread the holiday cheer — tax-free!
Lifetime estate tax exemption
The estate tax exemption per individual jumps to $13.99 million in 2025 (up from $13.6 million in 2024), offering additional planning opportunities for high-net-worth individuals.
Retirement contribution base increase
The maximum income used to calculate retirement plan contributions increases from $345,000 in 2024 to $350,000 in 2025.
Roth IRA phase-out range
For 2025, the Roth IRA income phase-out range increases to $150,000–$165,000 for single filers and $236,000–$246,000 for married filers (up from $146,000–$161,000 and $230,000–$240,000, respectively).
There's more to know
These are just some of the highlights. While not every change will affect you, understanding these updates can help you make smarter financial decisions. If you have questions or want to explore how these adjustments might impact your finances, our planning and tax teams are here to help.
Wishing you a happy, healthy and prosperous 2025!
Diversified is a registered investment adviser, and the registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC.
A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.
Diversified, LLC does not provide tax advice and should not be relied upon for purposes of filing taxes, estimating tax liabilities or avoiding any tax or penalty imposed by law. The information provided by Diversified LLC should not be a substitute for consulting a qualified tax adviser, accountant or other professional concerning the application of tax law or an individual tax situation.
Nothing provided in this article constitutes tax advice. Individuals should seek the advice of their own tax adviser for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

In March 2010, Andrew Rosen joined Diversified, bringing with him nine years of financial industry experience. As a financial planner, Andrew forges lifelong relationships with clients, coaching them through all stages of life. He has obtained his Series 6, 7 and 63, along with property/casualty and health/life insurance licenses. Andrew consistently delivers high-level, concierge service to all clients.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summer
The Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic Spring
A chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? Wrong
The wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term Care
Many people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain Market
In an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
Retire in Costa Rica for Expat Heaven
When you retire in Costa Rica, you get natural beauty, ease of relocation and affordability. Will you become a part of its thriving expat community?
-
My First $1 Million: Events Industry CEO, 65, Northern New Jersey
Ever wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Over Half of Americans Stumble Financially After Losing a Loved One. Are You Prepared?
Losing a loved one can be overwhelming, and for many, it also puts an unexpected strain on their finances, a study shows