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New Year New Numbers 

  • Writer: Hannah Boundy, CFA®, CFP®
    Hannah Boundy, CFA®, CFP®
  • Jan 30
  • 5 min read

For many, the start of a new year means new goals and resolutions, maybe a closet cleanout to make room for those new gifts or a fridge wipe-down. For those of us in the financial planning industry, it means a new set of numbers to memorize. Not only that but with April 15th just around the corner (it’s closer than you think!), it’s time to start thinking about taxes and the related to-dos. If you’re the type that likes to stay on top of things or have hoped to become that kind of person this year (power to you!), please read on. 

 

Tax Deadlines 

This year, taxes are due on Tuesday, April 15th. At this point in the year, many employers have already begun issuing W2s, and if you worked as an employee last year, you’ll want to make sure to download yours (or scan it from the mail) and get it to your CPA. Other common forms you’ll need to provide include the many varieties of 1099s ranging from 1099 INT, which reports interest income on investments, 1099 DIV, which reports dividend earnings, and 1099 MISC, which reports, well, miscellaneous income (commonly rents and royalties).  

 

For those of you who are clients with us, Schwab typically sends out two waves of 1099s – the first at the end of January and the second in mid-February. Often, the initial wave ends up getting revised and resent in February, so we advise our clients to wait until the end of February to download those files and send them to your CPA. We know that can be frustrating – it's always nice to get your taxes done early! But keep in mind that they’re trying to compile a year’s worth of data in a short amount of time, and accuracy is key.   



Deductions 

For 2024, the standard deduction is $14,600 for single filers, $21,900 for head of household (HOH) and married filing separate (MSF), and $29,200 for married filing jointly (MFJ). This means that if the sum of your itemized deductions for things like mortgage interest, state and local taxes, and charitable giving don’t exceed those amounts, you’ll likely end up taking the standard deduction for your tax situation. If you’re not sure about whether or not to itemize, be sure to reach out to your CPA, who can advise you on the specifics of your situation.  

 

Extending 

Sometimes, all the organization in the world still may not mean you can file your tax return on time. This can be especially true for business owners or those with pass-through income given the delays they might experience waiting for their business entity to file and distribute K-1 forms. If this is the case for you, you can file an extension, which will give you until October 15th to file. However, it’s incredibly important to remember that while this buys you more time to file, it does not buy you more time to pay your taxes. It’s critical that you estimate and pay what you owe by the original due date to avoid additional costs. Additional costs may include underpayment penalties, interest, and even failure to pay penalties. If your CPA believes you are underpaid for tax, they may recommend you make an extension payment when you request an extension to file your return. 

 

For 2025 

Each year, the IRS provides guidance on updated limits for making contributions to various tax-advantaged accounts as well as where the new tax brackets fall. This is typically done to account for the effects of inflation, meaning that limits and brackets are usually adjusted slightly upwards, though not always. While this is not an exhaustive list, here are a few of the most commonly referenced: 

 

Standard Deductions 

In 2025, the standard deductions will increase to $15,000 for those filing single, $22,500 for head of household and married filing separate, and $30,000 for married filing jointly. 

 

Retirement 

The maximum IRA and Roth IRA contributions will remain at $7,000 for 2025. IRA and Roth IRA catch-up contributions will also stay at $1,000 and are available for taxpayers who have turned 50 by 12/31/2025. The ability to contribute to a Roth IRA starts to phase out for those filing MFJ with adjusted gross income of $236,000 and phases out completely at an AGI over $246,000. For those filing single or head of household, the AGI income limits for Roths start at $150,000  and are fully phased out with an AGI over $165,000.  

 

401(k) and 403(b) contribution limits will remain at $23,500, with catch-up contributions remaining at $7,500 for those 50 and older and $11,250 for those aged 60, 61, 62, and 63. 

 

Health Savings Accounts 

Families can now contribute  $8,550 to health savings accounts (HSAs), while single (self-only) individuals may contribute up to $4,300. The catch-up contribution for individuals 55 and older by 12/31/2025 is $1,000. HSAs are available for health insurance plans with deductibles that exceed $3,300 for families and $1,650 for individuals.  

 

Updated tax brackets 

The tax brackets did slightly change for both income and capital gains. They are as follows (per the IRS website):  


For tax year 2025, the top tax rate remains 37% for individual single taxpayers with incomes greater than $626,350 ($751,600 for married couples filing jointly). The other rates are: 

  • 35% for incomes over $250,525 ($501,050 for married couples filing jointly). 

  • 32% for incomes over $197,300 ($394,600 for married couples filing jointly). 

  • 24% for incomes over $103,350 ($206,700 for married couples filing jointly). 

  • 22% for incomes over $48,475 ($96,950 for married couples filing jointly). 

  • 12% for incomes over $11,925 ($23,850 for married couples filing jointly). 

  • 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly). 

 

The maximum taxable income for 0% long-term capital gains amounts are: 

  • $96,700 for married filing jointly 

  • $48,350 for single individuals and those married filing separately 

  • $64,750 for those filing head of household 

 

The maximum taxable income for 15% long-term capital gains amounts are: 

  • $600,050 for married filing jointly 

  • $533,400 for single individuals 

  • $566,700 for those filing head of household 

  • $300,000 for those filing married filing separately 

 

Long-term capital gains in excess of these amounts are taxed at the 20% level.  

 

While there are many other updated tax numbers, these are the most common and helpful to be aware of when it comes to tax and financial planning for the upcoming year. A more detailed document of the more than 50 tax revisions can be found here: https://www.irs.gov/pub/irs-drop/rp-24-40.pdf . If you have any specific questions regarding how these new limits may affect you, we highly encourage you to reach out to your advisor and/or CPA.  

 

 

IRS Releases Tax Inflation Adjustments for Tax Year 2025. https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025. Accessed 30 Jan. 2025. 


PIMCO. 2025 Tax Reference Guide, Pimco Education, Newport Beach, CA, 2025. 


Schwab.com. “An Overview of the Brokerage 1099 Tax Form.” Schwab Brokerage, 7 Mar. 2023, www.schwab.com/learn/story/overview-brokerage-1099-tax-form. 


Schwab.com. “Tax Filing: Are You Ready?” Schwab Brokerage, 13 Nov. 2024, www.schwab.com/learn/story/tax-filing-are-you-ready. 

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