Expert says new financial rules bring tax and retirement adjustments

MILWAUKEE (CBS 58) -- New financial regulations taking effect in 2025 will impact tax deductions, retirement contributions and Social Security benefits. Tom Neumann of Drake & Associates talked about these changes when he joined us on Wednesday, Jan. 29.

The standard deduction for single filers and married individuals filing separately increases by $400 to $15,000. Married couples filing jointly will see an $800 increase to $30,000. The IRS has also adjusted tax brackets for inflation.

Neumann also said retirement contribution limits are increasing, with 401(k), 403(b), and similar plans allowing up to $23,500. The catch-up contribution for those 60 to 63 rises to $11,250. Part-time employees will qualify for 401(k) plans after two years instead of three. Inherited IRA accounts must be emptied within 10 years to avoid a 25% penalty.

Neumann advised reviewing tax withholdings and retirement contributions to adjust for these changes. More information is available by visiting Drake & Associates online.