Boost Your Financial Future: 5 Smart Moves for Tax Savings in 2024 and 2025!

The IRS has released new tax brackets and contribution limits for 2025, which are detailed in the charts below. Before we dive into the specifics of the 2025 tax year, let’s examine five actions you can take now to maximize your tax position for 2024:

1. Maximize your 401(k) contributions
2. Make a contribution to your IRA/Roth
3. Fund your HSA
4. Tax-loss harvesting
5. Establish a 529 plan
   

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Now that you have these accounts funded, it’s time to invest them. I can assist you in this process. Based on your account values, financial objectives, and time horizon, we can create a plan to make your funds work for you.
For those of you preparing your tax plan for 2025, here are some crucial details you’ll need to know. Tax brackets have been adjusted for inflation, with an approximate 2.8% increase, which is smaller than in previous years. The Tax Cuts and Jobs Act will expire at the end of 2025, potentially pushing taxpayers into higher brackets in the future. Additionally, the Secure Act has introduced some new provisions.

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Deductions

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Contribution Limitations

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2025 Secure Act UpdateAutomatic enrollment for 401(k) plans will require employers to set the contribution rate between 3% and 10%, with automatic annual increases of 1% until the maximum allowed by the employer is met. This maximum could be up to 15% of your paycheck.
This will be the last year that catch-up contributions for individuals earning over $145,000 will be made on a pre-tax basis. Starting in 2026, all catch-up contributions will need to be Roth or after-tax contributions.
Individuals aged 60 to 64 will be eligible to contribute the greater of $10,000 or 150% of the regular catch-up contributions. You can see all of this reflected in the charts below.
Part-time workers are eligible for retirement benefits if they have worked for 3+ years and have either earned $500 per hour or completed 1,000 hours in one year. The maximum contribution is the total of the two employer contributions. Otherwise, you will not qualify for the pre-tax contribution.
It’s time to review your current situation and plan for the upcoming year. If you contribute to a 401(k) or other retirement accounts, it’s important to create a strategy so you don’t have to worry about future tax implications. Set an appointment with me today.

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Referencehttps://assets.bbhub.io/bna/sites/19/2024/09/BTAX_2025-Projected-Tax-Rates-Inflation-Adjustments_and_covers.pdf
https://www.milliman.com/en/insight/2025-irs-limits-forecast-march
https://www.cbsnews.com/news/taxes-2025-tax-brackets-irs-inflation-adjustments/
https://www.usatoday.com/story/money/personalfinance/2024/07/22/tax-cuts-jobs-act-expires-2025/74473843007/