2025 TAX CHANGES

Tax season is here again, and with it comes a new set of tax brackets, deductions, and rules that can make even the most financially savvy taxpayer scratch their head. If you’re wondering how the 2025 tax updates will impact your paycheck, investments, and deductions, you’re in the right place.

The good news? The changes are not as dramatic as some years past, but they still matter—especially if you want to keep more of your hard-earned money.

Our tax attorney at PLG advises clients in the many complex facets of taxes. Feel welcome to contact us today to schedule a consultation.

Let’s dive into the key tax updates for 2025 and what they mean for you.

Every year, the IRS adjusts tax brackets for inflation. While the rates themselves remain the same, the income ranges have shifted slightly. Here’s a quick rundown:

• Single Filers: You’ll pay 10% on income up to $11,925, with rates progressively increasing up to 37% for income exceeding $626,350.
• Married Filing Jointly: The 10% bracket covers income up to $23,850, while the 37% bracket kicks in at $751,600 and beyond.
• Heads of Household: The 37% rate starts at $626,350, with lower brackets adjusted accordingly.

What does this mean for you? If you received a raise in 2024, you might not jump to a higher tax bracket as quickly as before, thanks to the inflation adjustment.

For business owners, there’s some stability—the corporate tax rate remains at 21%. This consistency makes it easier for companies to plan ahead without unexpected tax hikes.

If you’re an investor, capital gains tax rates are another key area to watch. The long-term capital gains tax remains at 15% for most taxpayers, but if your income exceeds $600,050 (married filing jointly) or $533,400 (single filers), you’ll be subject to the higher 20% rate.

Short-term capital gains (on assets held for one year or less) are taxed as ordinary income, meaning they follow the same brackets as your wages.

One of the best ways to reduce your taxable income is by claiming the standard deduction. In 2025, the deduction has increased:

• Single Filers: $15,000 (up from $13,850 in 2024)
• Married Filing Jointly: $30,000
• Head of Household: $22,500

For many taxpayers, these increases mean less taxable income and a lower tax bill—without having to itemize deductions.

Planning for retirement? The IRS has increased contribution limits for tax-advantaged accounts. Here’s what you can now contribute:

• 401(k) Plans: $23,500 (or $31,000 if you’re 50 or older)
• Traditional & Roth IRAs: $7,000 (or $8,000 if you’re 50 or older)

These increases allow you to reduce your taxable income while building a stronger financial future.

If you earn wages, you’re paying Social Security and Medicare taxes (FICA). 

For 2025:

• Social Security Tax: 6.2% (up to a wage cap of $190,688 for the self-employed)
• Medicare Tax: 1.45% for most earners, with an additional 0.9% surtax if you make more than $200,000 (single) or $250,000 (married filing jointly).

These taxes come straight out of your paycheck, so it’s good to know what to expect.

For most people, the biggest impacts of the 2025 tax updates will come from:

1. Slightly higher tax brackets – meaning less income taxed at higher rates.
2. A larger standard deduction – reducing taxable income for most taxpayers.
3. Higher contribution limits for retirement accounts – allowing for more tax-deferred savings.

While taxes aren’t the most exciting topic, understanding these changes can help you keep more money in your pocket. Whether you’re an employee, investor, or business owner, knowing how the system works is the first step toward making smarter financial decisions.

Taxes can never be avoided. It is best to have a solid tax plan in place. If an issue arises, an immediate, comprehensive response is preferable. At Pritchett Law Group, our tax attorney in Oklahoma handles a range of tax matters with the aim of ensuring the best possible outcome for our clients. Contact us today by filling out the online form or calling us at (918) 509-3891 to schedule a consultation.