Welcoming 2025 - Planning and Managing Taxes
 

We wish you a Happy New Year 2025! May this year bring you endless possibilities, positivity, and joy. We hope it is filled with love, abundance, and growing prosperity. 

 

Thank you for the opportunity to be your partner in preparing and planning your taxes. We care for your unique situation, help you understand tax changes, guide you in minimizing your taxes, and draw tax-efficient investment strategies. 

 

In this post, you will find key info to make taxes easier to handle.   As always, we are just a click away. You can reach us via client portal at www.rcstax.com. Please note that we moved to a new location in Redmond (17530 NE Union Hill Road, #100, Redmond, WA 98052).   

 

Planning for 2025 

  • Your standard deduction in 2025 will be higher than it was in 2024. For married people filing jointly, it increases by $800, from $29,200 to $30,000. 
  • The tax rate structure, which ranges from 10 to 37 percent, remains the same; however, the tax bracket thresholds have been adjusted for inflation (~2.7%). 

 

Retirement Savings 

  • Retirement savings to a qualified account such as a 401(k) or 403(b) has increased to $23,500. To max out you’ll need to set aside $1958.33 per month or $903.85 every two weeks. 
  • Catch-up contribution, for those in 50 or older, remains the same as $7,500 in 2025. You can make an additional catch-up contribution of up to $11,250 if you’re 60, 61, 62, or 63. 
  • The limit on the total employer and employee contributions to these plans (e.g. 401(k) or 403(b) ) is now $70,000. 
  • The limit on annual contributions to an IRA remains at $7,000. To max out you’ll need to set aside $269.23 every two weeks. 
    • You can make after-tax contributions to a traditional IRA regardless of how high your income is. 
    • To claim a tax deduction, however, your income needs to fall below certain limits. 
  • For details check our blog here

 

HSAs and FSAs 

  • For those with health savings accounts, the 2025 limit for contributions will rise to $4,300 for self-coverage and $8,550 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution. 
  • Starting in 2025, taxpayers who contribute to a health flexible spending account (FSA) can contribute up to $3,300 and, if their plan permits, carry over up to $660 into the next tax year. 

 

Gift tax exclusion 

  • Estate planning: The TCJA’s increased estate and gift tax exemptions are set to expire in 2025. Consider utilizing higher exemptions now through gifts or trusts. 
  • The annual exclusion for gifts, which limits how much taxpayers can give an individual without filing a gift tax return on certain gifts, will increase to $19,000 per person in 2025, up $1,000 from 2024. 

 

Deductions 

  • Pass-through business ownership: The 20% qualified business income deduction is set to expire in 2025. Business owners should evaluate their eligibility and consider restructuring to maximize benefits. 

  • Maximizing deductions: The SALT cap and other itemized deduction limits may expire in 2025. Consider strategies like bunching deductions or prepaying taxes. 

 

Key Dates 

Personal Tax Returns 

  • US income tax is a pay-as-you-go model. To avoid interest-based penalties, you must pay at least 90% of your taxes-due by regular due dates.  
  • The last quarterly payment for 2024 including additional tax payments due to non-wage income (e.g. capital gains) is due on January 15, 2025. 
  • Taxes are due for most on April 15, 2025. Taxpayers who are serving or living outside the U.S. have until June 16 to file their 2024 tax return. 
  • April 15 is also the last day that you can contribute to an IRA or health savings account (HSA) or Solo 401K or SEP plans for 2024. If you made excess contributions to any of these accounts in 2024, these must also be withdrawn by April 15. 
  • With diversified incomes (i.e. if you are expecting K1 forms on your investment) it is normal to file an extension. Personal return extensions are due October 15, 2025. 

 

Business Tax Returns 

  • Partnership and S-corporation taxes are due on March 17, 2025. Extensions are due by September 15, 2025. 
  • Corporate tax returns are due on April 15, 2025. Extensions are due by October 15, 2025. 
  • Nonprofits are due on May 15th, 2025. Extensions are due by November 15, 2025. 

 

Beneficial Ownership Information (BOI) 

  • Corporate Transparency Act (CTA) requires nonexempt companies to report their beneficial owners. Businesses are required to file their initial beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) by Jan. 13, 2025, and new businesses were required to file within 30 days. 
  • Learn more about BOI here 

 

Get ready to handle your Tax Return 

  • We request you to upload your tax documents into the secure client portal by March 15th to ensure the completion of your returns by the due date. If you are looking to file an extension, we can calculate taxes due to avoid underpayment penalties. 
  • We recommend you schedule your appointment to finalize the 2024 tax with us now and upload your tax documents as you receive them into the secure client portal. 

  • Consider enabling two factor authentication to your account (learn more here). 

 

Our heartfelt gratitude for allowing us to be part of your journey. Thank you for your trust and support. We look forward to continuing to serve you in the year ahead!