Tax season is officially upon us! With the new year comes updated tax laws, and with those changes, new planning opportunities.
Below are five notable updates to be aware of as you prepare for the year ahead. While not every change will apply to everyone, several may affect how you plan, give, or save money in 2025 and beyond.
1. Standard Deduction Increases
For the 2025 tax year:
- Single filers have a standard deduction of $15,750
- Married filing jointly filers have a standard deduction of $31,500
If you are age 65 or older, an additional deduction applies:
$2,000 for single filers
$3,200 ($1,600 per spouse) for those filing jointly
Effective 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the current additional standard deduction for seniors under existing law.
- $6,000 per eligible individual (i.e., $12,000 for a married couple where both spouses qualify)
- Deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).
2. Charitable Donation Changes
While these changes do not take effect until the 2026 tax year, you may want to evaluate your giving strategy now to position yourself for future success.
Beginning in 2026:
- Taxpayers who itemize will only be able to deduct the portion of charitable contributions that exceeds 0.5% of their Adjusted Gross Income (AGI)
- Taxpayers who do not itemize may deduct up to:
- $1,000 for single filers
- $2,000 for joint filers for charitable cash gifts
Because of these changes—and the additional strategies available—working with a tax professional can help determine the most effective way to maximize the tax benefits of charitable giving.
3. IRA Contribution Maximums Increased
The IRS announced that Roth IRA contribution limits for 2026 will increase:
- $7,500 for individuals under age 50
- An additional $1,100 catch-up contribution for those ages 50 or older
This brings the total possible contribution to $8,600 for eligible individuals. If you have consistently maxed out contributions in the past, it may be worth planning ahead to reach the new limit.
4. 401(k) Contribution Maximums Increased
The IRS also announced higher contribution limits for 401(k) plans in 2026:
- $24,500 maximum for employee contributions
- $72,000 maximum for combined employee and employer contributions
Catch-up contributions have also increased:
- $8,000 for individuals age 50 or older
- $11,250 for those between ages 60 and 63
These higher limits may create additional opportunities for retirement savings, particularly during peak earning years.
5. Social Security Payments Increased
If you are currently receiving payments, you may have noticed an increase in Social Security benefits. The 2026 cost-of-living adjustment (COLA) is 2.8% increase, based on inflation effective starting in January of this year. This adjustment is designed to help benefits keep pace with rising costs.
Consult Your Tax Professional
While Harvest Point® does not provide tax or legal advice, we do offer tax-conscious financial planning. Approaching tax season with thoughtful preparation can help reduce stress, save time, and minimize potential errors.
For a clearer understanding of which tax forms to expect—and when—we invite you to watch the Tax Tips Webinar our team hosted on January 22nd.
As always, continue to consult your tax professional with any tax-specific questions or concerns.
If you’re seeking guidance on your financial journey, we would love to connect. Fill out our Discovery Form to schedule a 30-minute introductory call. Together, we can explore your goals, values, and legacy to determine whether Harvest Point® is the right partner for you.