If you’re looking for some news that’s not related to the upcoming election, boy, do we have a deal for you. As 2024 wraps up, there’s a slew of tax, Social Security, and retirement plan updates that might impact you.
Social Security updates
First up, the Social Security Administration recently released its cost-of-living adjustments. Here are a few of the high-level highlights:
- Individual wages (aka earned income) that are subject to the 6.2% old age, survivors, and disability insurance tax will increase from $168,600 to $176,100.
- There’s still no limit on wages for the Medicare hospital insurance tax of 1.45%.
- Social Security and Supplemental Security Income beneficiaries will get a 2.5% bump. That means the average Social Security retirement benefit will increase by about $50 per month.
The SSA says it’ll start issuing simplified one-page cost-of-living adjustment notices to Social Security beneficiaries in early December of this year. If you set up a my Social Security account by November, you can log into your account to see your cost-of-living adjustments. You can find other SSA info on this fact sheet.
401(k) and IRA 2025 limits
In 2025, the IRS says the amount you can contribute to your 401(k) plan will go up $500, to $23,500. The amount for individual retirement accounts will stay the same at $7,000.
If you’re 60, 61, 62, or 63, there’s a higher catch-up contribution for IRAs thanks to changes made in SECURE 2.0. Instead of the $7,500 for those who are 50 and older who take part in most retirement plans, the limit is $11,250.
IRS’s warning about hurricane scams
If you want to give to those affected by Hurricanes Milton and Helene, watch out for bad actors. The IRS’s warning provides some tools to make sure you don’t get taken. Scammers often use names similar to or the same as well-respected charities. They might also set up fake emails, websites, and phone numbers to trick people. Make sure to do your research and check a nonprofit’s credentials before donating.
IRS’s 2025 inflation adjustments
The IRS made changes to the standard deduction — among a lot of other adjustments — to account for inflation for the 2025 tax year.
Standard deductions for ’25 tax year
- Single taxpayers and married and filing separately: $15,000
- Married couples filing jointly: $30,000, an increase of $800 from tax year 2024.
- Heads of households: $22,500
Marginal rates for ’25 tax year
- 37% for incomes over $626,350 ($751,600 for married couples filing jointly)
- 35% for incomes over $250,525 ($501,050 for married couples filing jointly)
- 32% for incomes over $197,300 ($394,600 for married couples filing jointly)
- 24% for incomes over $103,350 ($206,700 for married couples filing jointly)
- 22% for incomes over $48,475 ($96,950 for married couples filing jointly)
- 12% for incomes over $11,925 ($23,850 for married couples filing jointly)
- 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly)
Earned Income Tax Credits in ’25
If you’re a qualifying taxpayer with three or more qualifying children, the Earned Income Tax Credit amount is $8,046.
Still the same in 2025
- Personal exemptions are still zero.
- Itemized deductions still have no limitations.
- Lifetime learning credits are still phased out for those with modified adjusted gross income of over $80,000 or $160,000 for joint returns.
Questions about tax, social security, or retirement? Let us know.