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What’s New for the 2025 Tax Season: Key Changes You Need to Know

Updated: Feb 21


Tax Updates

As we step into the 2025 tax season, business owners, entrepreneurs, and individual taxpayers must stay informed about the latest tax changes to optimize their financial strategy. The IRS has implemented several updates, including new tax brackets, increased deductions, and expanded credits, which could significantly impact how you file your 2024 tax return.

Key Tax Changes for 2025 Season

Adjustments to Tax Brackets and Rates

The IRS has adjusted tax brackets for inflation, which could affect the amount of income tax you owe. Here’s a summary of the key changes:

Higher Standard Deduction

For the 2024 tax year (filed in 2025), the standard deduction has increased as follows:

  • Single filers: Increased from the previous year.

  • Married filing jointly: Increased to reflect inflation adjustments.

  • Heads of households: Adjusted upward to provide more tax relief.

This means more taxpayers may opt for the standard deduction instead of itemizing, simplifying the filing process while maximizing deductions.


Source Link: IRS releases tax inflation adjustments for tax year 2025 | Internal Revenue Service

Expanded Child Tax Credit (CTC)

The Child Tax Credit has been adjusted to provide additional financial relief for families. Key updates include:

  • Higher credit amounts per qualifying child.

  • Expanded eligibility criteria for low-income families.

  • Potential refundability enhancements that allow more taxpayers to benefit.


Source Link: IRS releases tax inflation adjustments for tax year 2025 | Internal Revenue Service


Need professional help with your taxes? Contact us now for expert guidance!

Changes in Retirement Contributions and Deductions

For those contributing to retirement accounts, the IRS has increased the contribution limits for:

  • 401(k), 403(b), and most 457 plans

  • Traditional and Roth IRAs

  • Catch-up contributions for individuals aged 50 and older

These changes provide an opportunity to maximize tax-deferred savings and prepare for a secure financial future.


Source Link: IRS releases tax inflation adjustments for tax year 2025 | Internal Revenue Service

Business Tax Changes

If you own a business, be aware of the following tax law updates:

  • Increased Section 179 deduction limits, allowing businesses to deduct the cost of qualified equipment purchases.

  • Adjustments to Qualified Business Income Deduction (QBI) for pass-through entities.

  • New compliance requirements related to digital transactions and payment processors (1099-K reporting thresholds).

  • Potential tax credits for businesses investing in green energy and employee benefits.


Source Link: IRS releases tax inflation adjustments for tax year 2025 | Internal Revenue Service

Tax Breaks for Energy Efficiency and EV Credits

Taxpayers investing in energy-efficient home improvements or electric vehicles (EVs) may qualify for updated credits:

  • Residential Energy Efficient Property Credit has expanded.

  • EV tax credits are available for qualifying new and used electric vehicles, with modified eligibility rules.


Source Link: IRS releases tax inflation adjustments for tax year 2025 | Internal Revenue Service


Ready to file your taxes? Contact us now to get started!

Healthcare-Related Tax Benefits

Updates to the Affordable Care Act (ACA) and Health Savings Accounts (HSAs) include:

  • Higher contribution limits for HSAs and Flexible Spending Accounts (FSAs).

  • Adjustments to ACA premium tax credits to make healthcare more affordable.


Source Link: IRS releases tax inflation adjustments for tax year 2025 | Internal Revenue Service

IRS Enforcement and Compliance Focus

The IRS has increased its focus on compliance, particularly:

  • Cryptocurrency transactions: New reporting requirements for digital assets.

  • Gig economy workers: Stricter 1099-K reporting for freelancers and independent contractors.

  • High-income audits: Enhanced enforcement for tax avoidance schemes.


Source Link: IRS releases tax inflation adjustments for tax year 2025 | Internal Revenue Service


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How to Prepare for the 2025 Tax Season

With these changes in place, it’s essential to take proactive steps to ensure compliance and maximize tax benefits. Consider the following:

  • Review your tax withholding to avoid surprises during tax time.

  • Plan deductions and credits to optimize your tax position.

  • Maximize retirement contributions for tax savings.

  • Consult with tax professionals to navigate new regulations effectively.

How We Can Help

Understanding tax law changes can be overwhelming, but you don’t have to navigate them alone. Our expert team at Loomis Reddick & Bishop Business & Accounting Advisory Services is here to help you strategize, comply, and maximize your tax benefits.


Contact Us

Schedule a Consultation Today! 

Let us empower your business and personal finances for success this tax season!




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