Tax inflation adjustments and retirement limits for 2025

Stay on top of the cost-of-living changes from the IRS and other federal agencies with this guide.

Person looking over financial documents.

Every year, federal agencies like the Internal Revenue Service and Social Security Administration assess the impact of inflation and the current environment on their areas of oversight. Often, this results in cost-of-living adjustments (COLA), which may change tax thresholds, retirement contribution limits and other tax-advantaged plans that are inflation-adjusted by law.

To help you plan, here are key 2025 adjustments that could affect how you save, spend and invest. As you review these numbers, an Ameriprise financial advisor is available to discuss your financial strategy and any potential adjustments to consider.

Tax inflation adjustments

 

Income tax brackets – for taxable income in 2024

Tax bracket

Single

Married filing jointly

Head of household

Married filing separately

10%

$0–$11,600

$0–$23,200

$0–$16,550

$0–$11,600

12%

$11,600–

$47,150

$23,200–

$94,300

$16,550–

$63,100

$11,600–
$47,150

22%

$47,150–

$100,525

$94,300–

$201,050

$63,100–

$100,500

$47,150–
$100,525

24%

$100,525– $191,950

$201,050–$383,900

$100,500–$191,950

$100,525–

$191,950

32%

$191,950–$243,725

$383,900–$487,450

$191,950–$243,700

$191,950–$243,725

35%

$243,725–$609,350

$487,450–$731,200

$243,700–$609,350

$243,725–$365,600

37%

$609,350+

$731,200+

$609,350+

$365,600

Income tax brackets – for taxable income in 2025

Tax bracket

Single

Married filing jointly

Head of household

Married filing separately

10%

$0–$11,925

$0–$23,850

$0–$17,000

$0–$11,925

12%

$11,925–

$48,475

$23,850–

$96,950

$17,000–

$64,850

$11,925–
$48,475

22%

$48,475–

$103,350

$96,950–

$206,700

$64,850–

$103,350

$48,475–
$103,350

24%

$103,350– $197,300

$206,700–$394,600

$103,350–$197,300

$103,350–

$197,300

32%

$197,300–$250,525

$394,600–$501,050

$197,300–$250,500

$197,300–$250,525

35%

$250,525–$626,350

$501,050–$751,600

$250,500–$626,350

$250,525–$375,800

37%

$626,350+

$751,600+

$626,350+

$375,800+

General standard deduction  

Filing status

2024

2025

Single

$14,600

$15,000

Married filing jointly

$29,200

$30,000

Head of household

$21,900

$22,500

Married filing separately

$14,600

$15,000

You may be eligible for an additional amount if you are 65 or older or blind.

Lifetime gift and estate tax exclusion

2024

2025

$13.61 million

$13.99 million

Annual gift tax exclusion*

2024

2025

$18,000

$19,000

*Per donee, per year.

 

Retirement contribution limits       

                           

401(k), 403(b), 457 and Thrift Savings Plans

 

2024

2025

Elective deferral limit

$23,000

$23,500

Catch-up amount for employees ages 50+

$7,500

$7,500 (no change)

Catch-up amount for employees ages 60-63*

Not applicable

$11,250

*SECURE Act 2.0 increased the catch-up contribution limit for individuals ages 60-63, beginning in 2025.

SIMPLE retirement plans

 

2024

2025

Elective deferral limit

$16,000

$16,500

Catch-up amount for individuals ages 50+

$3,500

$3,500 (no change)

Catch-up amount for employees ages 60-63*

Not applicable

$5,250

*SECURE Act 2.0 increased the catch-up contribution limit for individuals ages 60-63, beginning in 2025.

IRAs (traditional IRAs and Roth IRAs)

The below limits are the total contribution amounts you can make to any IRA (traditional or Roth).

 

2024

2025

Individuals

$7,000

$7,000 (no change)

Catch-up amount for individuals ages 50+

$1,000

$1,000 (no change)

 

Income phase-out ranges for Roth and traditional IRAs

The following are the modified adjusted gross income (MAGI) phase-out ranges for Roth IRAs and traditional IRAs.

 

MAGI phase-out range – for making contributions to Roth IRAs

 

2024

2025

Single/head of household

$146,000–$161,000

$150,000–$165,000

Married couple filing jointly

$230,000–$240,000

$236,000–$246,000

Married individual filing a separate return who makes contributions to a Roth IRA

$0–$10,000

$0–$10,000*

*Not subject to an annual cost-of-living adjustment.

 

MAGI phase-out range – for making deductible contributions to Traditional IRAs, if covered by a plan at work

 

2024

2025

Single/head of household

$77,000–$87,000

$79,000–$89,000

Married couple filing jointly

$123,000–$143,000

$126,000–$146,000

Individual not covered by a workplace retirement plan but is married to someone who is covered

$230,000–$240,000

$236,000–$246,000

Married individual filing a separate return who is covered by a workplace retirement plan

$0–$10,000

$0–$10,000*

*Not subject to an annual cost-of-living adjustment.

 

Health care account contribution limits

 

Health savings accounts (HSA)

 

2024

2025

Individual

$4,150

$4,300

Family

$8,300

$8,550

Catch up (for those 55+)

$1,000*

$1,000*

*Not subject to an annual cost-of-living adjustment.

Health care flexible spending accounts (FSA)

 

2024

2025

Maximum

$3,200

$3,300

Carryover maximum

$640

$660

 

 

Qualified charitable distribution (QCD) amounts

 

 

2024

2025

Regular limit

$105,000

$108,000

 

Social Security

 

Social Security COLA benefit increase

2024

2025

3.2%

2.5%

Maximum earnings subject to the Social Security tax

2024

2025

$168,600

$176,100

 

Earnings limitations for retirees

Some retirees who have begun to collect Social Security retirement benefits choose to continue working.  Individuals who are younger than full retirement age, collecting Social Security retirement benefits and are continuing to work, will have some or all their Social Security benefits reduced if they earn more than certain dollar amounts.1

 

2024

2025

Earnings limit for workers who are younger than full retirement age (benefits reduced $1 for each $2 over the earnings limit)

$22,320

$23,400

Earnings limit for people in the year they reach their full retirement age, but before the month of full retirement age (benefits reduced $1 for each $3 over the earnings limit)

$59,520

$62,160

How might these numbers affect your financial strategy?

Your Ameriprise financial advisor can walk you through how to take advantage of these tax adjustments considering your financial goals.

What changes would you recommend I make to my financial strategy given the 2025 tax-inflation adjustments? How can I take advantage of all the different tax-advantaged accounts available to me? How can I contribute the maximum amount allowed by the IRS to my retirement accounts?

When you’re ready to reach out to an Ameriprise financial advisor for a complimentary initial consultation, consider bringing these questions to your meeting.

When you’re ready to reach out to an Ameriprise financial advisor for a complimentary initial consultation, consider bringing these questions to your meeting.

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1 Any benefit reduction is not “lost.” Once full retirement age is attained, the monthly benefit will be increased permanently to account for the prior reduction(s). In the first year of retirement, a special rule may apply for certain individuals to allow a full Social Security check for any whole month you’re considered retired, regardless of earnings prior to retirement.
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Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
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