At AKtaxbiz, we understand how challenging it can be to stay on top of ever-changing tax laws. With new policies and adjustments being made regularly, it’s essential for individuals and businesses to be aware of the updates that could affect them.
In this edition of our newsletter, we’re breaking down some of the most important tax updates and changes for the upcoming year. Whether you’re filing as an individual or managing a business, these updates are vital for your planning and preparation.
1. Standard Deduction Increase
The IRS has raised the standard deduction for both individual and married taxpayers, which can result in more tax savings. For 2025, the standard deduction for single filers will be increased to $15,500, and for married couples filing jointly, it will rise to $31,000. This change will affect how much of your income is taxable, potentially lowering your overall tax liability.
2. Child Tax Credit Changes
The Child Tax Credit remains a powerful tool for families, but there have been some changes. For the 2025 tax year, the credit has been expanded for eligible children under the age of 17. Families who qualify may be able to receive up to $2,000 per child. It’s essential to ensure you meet the requirements and document all necessary details to take full advantage of this benefit.
3. Corporate Tax Rate Adjustments
For businesses, the corporate tax rate is undergoing adjustments. The rate remains at 21%, but certain tax incentives may be phased out or reduced. If your business qualifies for special deductions or credits, be sure to consult with your tax professional to maximize these benefits and remain compliant.
4. Retirement Savings Contributions Limits Increased
If you’re planning for retirement, you’ll be pleased to know that contribution limits for retirement accounts like 401(k)s and IRAs have been increased. For 2025, individuals can contribute up to $22,500 to their 401(k), with an additional catch-up contribution of $7,500 if you’re over 50. These changes allow you to save more for the future while reducing your taxable income.
5. Health Savings Account (HSA) Contribution Limit Increases
HSAs continue to be an effective way to save for healthcare expenses while reducing your taxable income. In 2025, the annual contribution limit for HSAs will increase to $4,850 for individuals and $9,750 for families. If you’re eligible, contributing to an HSA can be a great way to save on taxes while preparing for medical expenses.
6. Expanded Tax Credits for Energy-Efficient Home Improvements
For homeowners looking to upgrade their properties, the government is offering expanded tax credits for energy-efficient improvements. This includes credits for solar panels, electric vehicles, and other green home technologies. If you’ve made any of these improvements in the past year, be sure to claim these credits when filing your taxes!
7. IRS Enforcement and Audits
The IRS is stepping up its enforcement and audit efforts, particularly for higher-income earners and certain industries. It’s crucial to maintain accurate records and ensure that all deductions, credits, and income are reported correctly. Proper documentation can help you avoid penalties or potential audits down the road.
What This Means for You
These tax changes, while beneficial in some cases, can be complex. Whether you’re an individual, a small business owner, or an investor, staying informed is key to minimizing your tax burden and avoiding surprises. At AKtaxbiz, we’re here to help you navigate these updates and make the most of the opportunities available.
Ready to Tackle Your Taxes?
If you have any questions about these changes or need help preparing for the upcoming tax season, our team of experts is here to assist you. Contact us today to schedule a consultation, and let us help you stay ahead of the tax game
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