IRS boosts 401k contributions 

People can contribute more to their 401k plans in 2025.

The IRS has announced an increase in the amount individuals can contribute to their 401k plans in 2025, with the limit raised to $23,500 from $23,000 in 2024.

Workers participating in 403b and the federal government’s Thrift Savings Plan can also increase their annual contribution to $23,500 in 2025, up from $23,000 in 2024.

The big picture: While some annual contributions remain the same, such as the limit on annual contributions to an IRA, which will remain at $7,000, the IRA catch-up contribution limit for individuals 50 and over remains $1,000 for 2025.

  • Additionally, the standard deduction for single taxpayers and married individuals filing separately in tax year 2025 will increase to $15,000, a $400 rise from 2024. 
  • For couples filing jointly, the standard deduction will be $30,000 for 2025, an $800 increase from the previous year, and heads of households will receive a $22,500 standard deduction, up $600 from 2024.
  • Income thresholds for all seven federal tax bracket levels have been revised upward, and the Social Security Administration has also announced a 2.5% cost-of-living increase for benefits recipients starting in January 2025, resulting in an average jump of more than 5% on monthly checks for millions of people.
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