For most individuals and businesses, the moment they finish filing their taxes is a huge relief. The last thing they may want to do is start thinking about getting started on next year’s return, but it never hurts to be as prepared as possible. This is especially true when you consider how often the tax code changes. What was once a rock-solid strategy last year could be outmoded come the next tax season. New options for deductions may become available to you, and there could be changes to the way you file depending on your circumstances.
All of this is critical to keep in mind as you prepare for your next filing. Even if you haven’t even started thinking about preparing your 2025 taxes, you might want to be aware of some of the many changes that took effect this year. At Portfolio Advisors, we strive to know our clients’ financial and tax situations as closely as we can. We’ve been keeping a close eye on the most recent adjustments from the IRS so we can provide the highest level of value to you. Whether you’re a medical professional, educator, corporate executive or small-business owner, we’re here to help you navigate all the complexities of managing your finances. That includes making sure you know all about your options and obligations when it comes to your taxes, which is why we want to share some of the most important 2025 tax tips with regard to recent changes to the tax code.
Important 2025 Tax Changes to Know
With recent concerns about inflation affecting most Americans, the IRS responded in 2025 by making some changes to standard deductions and marginal tax brackets. For example, the standard deduction for single taxpayers was increased from $14,600 to $15,000. Married couples filing jointly will see their standard deduction increased from $29,200 to $30,000. This means most Americans filing their taxes for 2025 will be able to keep slightly more of their income by choosing the standard deduction rather than itemizing.
Inflation also moved the IRS to make some adjustments to the tax brackets for 2025. For instance, the threshold for the 22% bracket was incomes of more than $44,725 for individuals, $89,450 for married couple filing jointly. For the 2025 tax year, however, the threshold for the 22% bracket will be raised to incomes above $48,475 for individuals and greater than $96,950 for married couples filing jointly. This will have implications for many Americans who may find themselves in a lower tax bracket for 2025 than they were in 2024 even though their incomes may not have become lower.
Another potentially significant change to the tax code that could impact you when filing your 2025 taxes is a new threshold for capital gains taxes. Individuals who sold stocks, bonds, real estate and/or collectables in 2025 will be exempt from paying capital gains tax if their total taxable income is $48,350 or less. This represents an increase in the threshold for individuals in 2024, which was $47,025. If your income from the sale of capital assets is between $48,351 and $533,400, your capital gains tax rate will be 15%. Any income that exceeds $533,400 will result in a capital gains tax rate of 20%.
Other tax changes for the upcoming year that could have an effect on your filing for the 2025 year include:
- An increase in the dollar limit for flexible spending accounts to $3,300.
- A raise to the estate tax exemption from $13.6 million to $13.9 million.
- An increase in the gift tax exclusion from $18,000 to $19,000, meaning you can give up to $19,000 to an individual without incurring the gift tax.
Businesses Await Changes for 2025
Business owners were in a holding pattern as of late May 2025 as they await legislative action related to the expiration of certain elements of the 2017 Tax Cuts and Jobs Act. These include the rules regarding deducting business interest expenses and the pass-through income deduction. As small business owners wait to see what legislators and the current administration do about these and other provisions set to sundown at the end of the calendar year, Portfolio Advisors stands ready to help them make sense of whatever changes may occur.
Staying Informed and Compliant
Even an innocent mistake on your tax return can cause some significant headaches, which is why it’s important to stay on top of the changes coming to the tax code. Due to the complexity of the requirements, it can be a good idea to have expertise on your side you can trust. Working with experienced financial advisors like the experts here at Portfolio Advisors means you can have peace of mind. Our team understands how the laws impact you and your situation because we take the time to get to know you as closely as possible. You can trust our advisors to provide you with personalized service that addresses your needs now as well as in the long-term. With our help, you won’t have to worry about being caught off-guard by changes big or small so you can have the smoothest possible experience when filing.
The only constant, as always, is change. Whether the upcoming changes to the tax code have a major impact on your filing for 2025 or none at all, it’s critical to have someone close by who can help you navigate them and leverage them to your advantage. Portfolio Advisors believes in forging long-term relationships with our clients, serving as valued partners as we help them make sense of their finances and achieve their goals. From tax planning to investments to risk management, we offer personalized strategies and advice that can help you gain peace of mind now as well as into the future. To learn more about how we can make a real difference for you, reach out and speak with a member of our team today.
