Major Tax Changes to Watch in 2025 – Stay Ahead of the Game!
Tax laws are always changing, and 2025 could bring some big shifts, especially if key provisions from the Tax Cuts and Jobs Act (TCJA) expire at the end of the year. Here’s a simple breakdown of what could change and how to prepare.
1. Estate & Gift Taxes – The Limit is Dropping
Right now, you can gift or pass down $13.99 million tax-free per person ($27.98 million for couples).
In 2026, this could drop to about $7.25 million per person – meaning more estates could be taxed.
Action to take: Consider making large gifts now or setting up trusts before the limit shrinks.
2. Income Tax Rates – Could Be Going Up
The lower tax rates under TCJA may expire, meaning:
The 22% bracket could go up to 25%
The 24% bracket could jump to 28%
Action to take: Check your tax withholding and consider Roth IRA conversions to lock in today’s lower rates.
3. Standard Deduction & Personal Exemptions – Possible Changes
Right now, the standard deduction is $15,000 (single) and $30,000 (married couples).
Personal exemptions might come back, but the deduction amount could shrink.
Action to take: Keep track of deductible expenses (medical costs, donations) in case itemizing becomes better than taking the standard deduction.
4. Child Tax Credit – May Be Reduced
Right now, the Child Tax Credit is $2,000 per child with higher income limits.
If TCJA expires, the credit could drop and phase out for more families.
Action to take: Ensure you’re claiming all eligible dependents and adjust tax withholding if needed.
Conclusion
These changes aren’t set in stone, but it’s smart to plan ahead. A tax professional can help you make the right moves before 2025 ends.
Stay informed and take action now to minimize your tax bill later!