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Tax Updates for 2025
Contribution Limits
IRA contribution limits
$7,000 for individuals under age 50; $8,000 for individuals 50 and over. Both limits increased by $500 from 2023.
401k, 403b and 457 limits
$23,000 for individuals under age 50; $30,500 for individuals 50 and over. Both limits increased by $500 from 2023.
Simple IRA Limits
$16,000 for individuals under age 50; $19,500 for individuals 50 and over. Both limits increased by $500 from 2023.
Sep IRA Limits
$69,000 (The maximum amount that can be contributed to a simplified pension plan (SEP) is 25% of an employee’s compensation up to $69,000).
SOLO(K) Limits
$69,000 for individuals under age 50; $76,500 for individuals 50 and over. Both limits increased by $3,000 from 2023.
IRA Charitable Distributions (QCD)Limits
$69,000 for individuals under age 50; $76,500 for individuals 50 and over. Both limits increased by $3,000 from 2023.
Distribution in case of domestic abuse
Penalty-free withdrawals are also allowed, beginning in 2024, for certain amounts for individuals who need the funds in cases of domestic abuse. Victims of domestic abuse may receive the lesser of:
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$10,000 (adjusted for inflation after 2024) or
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50% of their account value without penalty.
If a taxpayer shares their home with someone other than their spouse, each occupant must complete their own Form 5695.
Penalty for failure to file a return
5% per month, up to five months (25%); if the return is 60 days or more late, the minimum penalty is the lesser of 100% of tax liability or $510.