2025 Tax Season: Key Changes and How to Prepare

The 2025 tax season is right around the corner, bringing significant adjustments to tax brackets and deductions to keep pace with inflation. From new deduction limits to updated tax credits, having a clear preparation strategy can help you optimize your returns.

Here’s everything you need to know.

1. Tax Brackets for 2024

The tax brackets for 2024 have been revised, affecting the returns filed in April 2025 (or October 2025 if you request an extension). Here are the updated brackets:

Tax brackets for corporations

2. Key Changes in Tax Filing for 2025

Here are some of the key changes taking effect for the 2025 tax season:

• Standard Deduction: The standard deduction for joint filers increases to $29,200, while for single filers, it rises to $14,600, and for heads of household, it’s $21,900.
• Foreign Income Exclusion: The foreign income exclusion for U.S. citizens working abroad increases to $126,500, simplifying filing for expatriates.
• Increase in Adoption Credit: The credit for qualified adoption expenses will be up to $16,810.

We invite you to calculate your company's tax payment here.

3. Strategies to Save on Your Tax Return

3.1 Take Advantage of All Deductions and Credits

‍With the increase in standard deductions and tax credits, now is a great time to review your eligibility for additional benefits or apply IRS section 179. If you’re uncertain, consult a tax advisor or contact us for assistance with your Income Tax filing.

3.2 Plan Your Health and Transportation Investments

‍Deductions for medical expenses and transportation benefits have also increased. For those using benefits like Health Savings Accounts (HSAs) or parking and transit benefits, maximizing these deductions can be key.

3.3 Anticipate Changes in Cash Flow

‍If your financial situation has changed, make sure to project tax payments to avoid surprises. Good cash flow management can help you prepare for higher tax payments or maximize refunds.

3.4 Consider Savings in Health Account Contributions

‍The limit for contributions to health savings accounts has increased to $3,200, and the maximum carryover for cafeteria plans is up to $640. Taking advantage of these benefits now can offer tax relief.

4. How Prodezk Can Help You Prepare for 2025

Tax season can be complex, but with a well-planned strategy, you can benefit from deductions and credits. At Prodezk, our advisors are ready to help you navigate the regulations and ensure you take advantage of all possible benefits on your tax return.

Contact us for personalized advice and maximize available deductions and tax credits!