Changes for 2025 - Bloom Advisors

By: Colin Fraser
Financial Advisor

The new year brings lots of anticipation, excitement, and updates from the IRS. Below is a simple summary of key changes to tax brackets and retirement plan contributions.

IRA Modified Adjusted Gross Income Phase-out Rules

For taxpayers filing Single or Head of Household (HOH) that are covered by a workplace retirement plan, the phase-out range was increased to between $79,000 and $89,000 of Modified Adjusted Gross income. This is up from $77,000 and $87,000 in 2024. For single, HOH taxpayers not covered by a workplace retirement plan, a full deduction is available regardless of Modified Adjusted Income.
For married couples filing jointly, if the spouse making the contribution is covered by a workplace retirement plan, the phase out range was increased to between $126,000 and $146,000, up from $123,000 and $143,000 in 2024.
For married couples filing jointly, if the spouse making the contribution is not covered by a workplace retirement plan, but their spouse is, the phase out was increased to between $236,000 and $246,000, up from $230,000 and $240,000.

Roth IRA Modified Adjusted Gross Income Phase-out Rules

For taxpayers filing Single or Head of Household, the phase out range was increased to between $150,000 and $165,000, up from $146,000 and $161,000.
For Married couples filing jointly, the phase-out range was increased to between $236,000 and $246,000, up from $230,000 and $240,000.

SIMPLE IRA Increased Limit as part of SECURE Act 2.0

Employers with 25 or less employees are automatically enrolled in an increased contribution limit. Employees are eligible to contribute up to $17,600 (instead of $16,500). If they are between ages 50-59, or 64 or older they can contribute an additional $3,850. Participants ages 60-63 can contribute a higher catch-up of $5,250. Employers with more than 25 employees are eligible to elect to apply these higher limits, but it is not required.