6 Personal and Business Tax Changes to Consider for 2025 Tax Planning

Home » Blog » 6 Personal and Business Tax Changes to Consider for 2025 Tax Planning

Part of effective tax planning is keeping an eye on changes in the tax code and tax laws both for the coming year and beyond. Now that the end of the year is near, here are six considerations that may impact your plan.

2025 tax brackets adjusted 2.8% for inflation

The IRS uses data provided by the Bureau of Labor Statistics to increase tax brackets each year and prevent “bracket creep” – while the adjustments aim to ensure that inflation doesn’t result in higher effective tax rates for individuals, it’s a good idea to estimate your taxable income for the coming year to see where you slot in.

HSA + FSA contribution limit increases

2025 Health Savings Account contribution limits: 4,300 for individuals and $8,550 for families
2025 Flexible Spending Account contribution limit: $3,300 per plan, with a carryover option of $660

Note that tax-advantaged retirement plan contribution limit increases have not yet been announced. The IRS typically releases these numbers in late October or November.

Gift and estate tax exclusions

For 2025, the annual gift tax exclusion will increase to $19,000 per recipient, and the estate tax exemption will rise to $13.99M.

3 tax breaks slated to expire after 2025

Unless Congress acts to extend/modify the 2017 Tax Cuts and Jobs Act (TCJA), 2025 will be the last year to take advantage of several tax breaks introduced by the bill.

The Adjusted Gross Income (AGI) limitation on cash donations to qualified charities will revert back to 50% starting in 2026. For large benefactors, next year will be the final opportunity to donate up to 60% of AGI.
The 20% Qualified Business Income (QBI) deduction for pass-through entities (partnerships, LLPs, LLCs, S-corps & sole proprietorships) is slated to expire at the end of 2025. This change could result in higher taxes for business owners, especially at small and mid-sized companies.
While not set to be phased out completely until 2027, the bonus depreciation limit for 2025 will drop to 40% of eligible property down from 60% in 2024. Businesses may want to plan capital investments accordingly, with the limit dropping to just 20% in 2026.