Tax Season 2025: Key Dates, Tax Law Changes, and Strategies for The Year Ahead

Key Tax Filing Dates and Deadlines in 2025  

The 2025 tax filing season begins, of course, on January 1st, with the deadline to file 2024 taxes falling on April 15th. Should you ask for an extension, the deadline to file an extended return is October 15th. 

Inflation Adjustments Coming in 2025  

The IRS has announced inflation adjustments that will affect taxpayers’ standard deductions and tax brackets in 2025.  

The standard deduction for single taxpayers increases by $400 to $15,000. The deduction for married couples filing jointly increases by $800 to $30,000, and those who file as head of household will see a $600 increase in their standard deduction, to a total of $22,500. 

For 2025, all tax bracket thresholds are increasing by approximately 2.8%. This means taxpayers can earn slightly more income in 2025 before moving into higher tax brackets, while the tax rates themselves (10%, 12%, 22%, 24%, 32%, 35%, and 37%) remain unchanged. For example, a single filer in 2025 can earn up to $626,350 before hitting the top 37% tax rate, compared to $609,350 in 2024 - a difference of $17,000. Similarly, married couples filing jointly can earn up to $751,600 in 2025 before reaching the 37% bracket, up from $731,200 in 2024 - an increase of $20,400. 

 Other increases for 2025 include: the health FSA contribution limit increases to $3,300 (up from $3,200 in 2024); the estate tax exemption increases to $13,990,000 (up from $13,610,000 in 2024); the annual gift exclusion increases to $19,000 (up from $18,000 in 2024); the maximum earned income tax credit increases to $8,046 for three or more qualifying children (up from $7,830 in 2024); and the transportation fringe benefit monthly limit increases to $325 (up from $315 in 2024).  

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A Critical Financial Planning Consideration: The 2025 TCJA Sunset   

The end of 2025 marks a pivotal moment as key provisions of the Tax Cuts and Jobs Act (TCJA) are set to expire. Without congressional action, January 1, 2026, will bring significant changes. These would include: higher tax rates across most brackets; substantially lower standard deductions; the return of personal exemptions; the removal of the SALT deduction cap; lower estate tax exemptions; a reduction in the Child Tax Credit from $2,000 to $1,000; and changes to qualified business income deductions. 

It's important to take these potential changes into account and adjust your financial plan accordingly if and when they occur. At WHZ, we're helping our clients to navigate these changes through personalized strategies aligned with their particular needs and stages of life.   

Here’s a high-level look at what you may want to consider if the sunset of the TCJA goes forward, depending on where you’re at in life. 

For those under 55, you may want to consider: accelerating your income into 2025 when beneficial; maximizing your contributions to tax-advantaged accounts; converting to a Roth IRA while tax rates remain lower; planning education funding with tax advantages in mind; and conducting an overall review of your investment strategy to ensure continued optimal tax efficiency.  

If you are over 55, you may want to: evaluate your estate plan before the exemption amounts decrease; consider accelerating planned charitable giving; review your retirement distribution strategies; assess the timing of your Social Security benefits; and plan for potential changes in retirement income taxation. 

 Business owners and executives have some additional things to consider. You may want to: review your business structure in consideration of potential tax changes; evaluate the timing of income recognition and expenses; evaluate and optimize retirement plan strategies; consider succession planning implications; and review your compensation structures and benefits. 

And lastly, if you have a high net worth, you may want to: consider estate planning adjustments before the exemption reduction goes into effect; review and adjust your gifting strategies to ensure they remain tax efficient; evaluate the structure and funding of any trusts; consider accelerating capital gains recognition; and plan for potential changes in itemized deductions. 

Whatever your particular situation, it will be important to stay aware of these potential tax law changes and be ready to adjust your financial strategy accordingly. There’s clearly a lot that could change and many moving parts to consider so if you’re not already working with a trusted accountant and financial advisor, this would be a good year to start. 

Our team at WHZ stays current with evolving tax legislation and its implications for our clients, so that they don’t have to. We take a comprehensive approach through our Plan Well, Invest Well, Live Well™ process, ensuring their tax strategy aligns with their broader financial goals while maintaining flexibility for potential legislative changes. 

To discuss how these changes might affect your financial plan, schedule a complimentary consultation on our website at whzwealth.com, or by calling (860) 928-2341.     

Authored by Senior Vice President, Financial Advisor Leisl L. Langevin CFP®, CDFA®. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.  Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084, 860.928.2341. http://www.whzwealth.com These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your financial advisor. WHZ Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice.