SIMPLE IRA notification deadline Friday, IRS releases 2025 tax brackets
By onAnnouncements | Legal
Businesses with a SIMPLE IRA must notify employees if they will keep or terminate the plan before Saturday, Nov. 2, making the deadline this Friday, according to the IRS.
The IRS says this gives employees the notice required ahead of the Jan. 1 change. If businesses plan to change to a 401(k) plan, now is also the time to start taking action.
It takes about 45 days to establish a new 401(k), according to Scott Broaddus, Irongate Capital Advisors Partner and lead advisor on the Society of Collision Repair Specialists (SCRS) Multiple Employer Plan. He said the process can begin as late as early November.
Any members interested in the SCRS plan should contact Broaddus at scott.broaddus@irongate-capital.com or 804-250-8920.
While inflation adjustments could change your tax bracket, you may be able to reduce your taxable income by maximizing contributions to retirement plans.
Last week, the IRS announced annual inflation adjustments for tax year 2025 that will apply to income tax returns to be filed starting in tax season 2026.
The standard deductions for married individuals filing separately will rise $400 to $15,000. Deductions for married couples filing jointly will rise by $800 to $30,000 and for heads of households, $600 to $22,500.
For marginal rates, the top tax rate remains 37% for individual single taxpayers with income greater than $626,350 or $751,600 for married couples filing jointly.
The other rates are:
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- 35% for incomes over $250,525 ($501,050 for married couples filing jointly).
- 32% for incomes over $197,300 ($394,600 for married couples filing jointly).
- 24% for incomes over $103,350 ($206,700 for married couples filing jointly).
- 22% for incomes over $48,475 ($96,950 for married couples filing jointly).
- 12% for incomes over $11,925 ($23,850 for married couples filing jointly).
- 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly).
Alternative minimum tax exemption amounts for unmarried individuals increased to $88,100 ($68,650 for married individuals filing separately). It begins to phase out at $626,350. The amount for married couples filing jointly increases to $137,000 and begins to phase out at $1,252,700.
Taxpayers with three or more qualifying children will have an earned income tax credit amount of $8,056, an increase from $7,830.
The dollar limitations for employee salary reductions for contributions to health flexible spending arrangements will rise to $3,300. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount will be $650, an increase from $640 in tax year 2024.
To see all inflation adjustments, click here.
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