[Last updated August 19, 2025]
If you’re a retiree, considering retiring, or taking care of someone who is retired, paying close attention to 2025 tax updates could benefit you. When it comes to retirement, every dollar counts, and the 2025 updates could impact your bottom line.
In addition to the annual adjustments for inflation, seniors will see some other changes. If you are a senior or caring for one, you can expect higher filing thresholds, enhanced estate and gift tax exemptions, and more. This guide will highlight significant tax law changes and explain how they affect you.
Income tax bracket changes
During the 2025 filing season, you won’t see any changes to tax rates, but you will notice that the income thresholds have shifted a bit. You may be in a slightly different tax bracket than the previous year due to the annual adjustment for inflation. Let’s take a look at the 2025 tax bracket breakdown below.
| Tax rate | Single or married filing separately | Married filing jointly | Head of household |
| 10% | $0 to $11,925 | $0 to $23,850 | $0 to $17,000 |
| 12% | $11,925 to $48,475 | $23,850 to $96,950 | $17,000 to $64,850 |
| 22% | $48,475 to $103,350 | $96,950 to $206,700 | $64,850 to $103,350 |
| 24% | $103,350 to $197,300 | $206,700 to $394,600 | $103,350 to $197,300 |
| 32% | $197,300 to $250,525 | $394,600 to $501,050 | $197,300 to $250,500 |
| 35% | $250,525 to $626,350 | $501,050 to $751,600 | $250,500 to $626,350 |
| 37% | $626,350 or more | $751,600 or more | $626,350 or more |
Larger standard deductions
In addition to the adjustments to the tax brackets, this tax season, you’ll also see another tax law change in an increase to the standard deduction, with a significant $6,000 bonus deduction for people aged 65 and older whose adjusted gross income (AGI) is $75,000 or less ($150,000 or less for married filing jointly). The increase means that less of your money will be exposed to taxes. Let’s take a look at the changes you will see:
| Filing status | Standard deduction | Extra deduction for those aged 65 and older |
| Single | $15,750 | $2,000, plus a $6,000 boost for qualifying income categories |
| Head of household | $23,625 | $2,000, plus a $6,000 boost for qualifying income categories |
| Married filing jointly or qualifying surviving spouse | $31,500 | $1,600 for each person over 65, plus a $6,000 boost for each person in qualifying income categories |
| Qualifying surviving spouse | $31,500 | $1,600, plus a $6,000 boost for qualifying income categories |
| Married filing separately | $15,750 | $1,600, plus a $6,000 boost for qualifying income categories |
Retirement savings changes
The IRS increased the maximum contribution amounts to certain retirement accounts and also allows for an annual catch-up contribution for people 50 and over. Let’s see how this breaks down, plan by plan:
| Retirement plan type | Maximum contribution | Catch-up contribution limit | Higher catch-up for people aged 60 to 63 | Total maximum |
| 401(k), 401(b), most 457s, and Thrift Savings Plans | $23,500 | $7,500 | $11,250 | $34,750 |
| Traditional and Roth IRAs | $7,000 | $1,000 | N/A | $8,000 |
| SIMPLE IRAs | $16,500 | $3,500 | N/A | $20,000 |
Long-term care insurance (LTCi) premium deductions
The tax-deductible limits for long-term care insurance (LTCi) premiums have also been adjusted. This tax year, there is an increase in the deductible portion of long-term care insurance premiums. Let’s take a look at these limits below:
| Age | Limit |
| 51 to 60 | $1,800 |
| 61 to 70 | $4,800 |
| 71 and up | $6,020 |
Estate and gift tax changes
The federal estate tax exemption limit has risen to $13,990,000, up from $13,610,000 in the previous tax year, and the annual gift exclusion limit has increased to $19,000 per person. These increases mean individuals can give away more without incurring taxes, benefiting older adults looking to pass on wealth.
Change in 1099-K reporting threshold for digital payment users
If you use third-party platforms like Venmo or PayPal to receive payment for goods or services, you may receive Form 1099-K in the mail this tax season. The IRS has lowered the threshold from $5,000 in payments to $2,500.
The bottom line
Keeping up with tax law changes can be overwhelming. Though numerous, these modifications for the tax year 2025 can be pivotal in shaping financial strategies for older adults and caregivers. While this guide offers a synopsis, it’s important to consult with a tax expert to use the nuances of these changes to your best advantage.
This information is for educational purposes and is not legal, financial, tax, or investment advice. It should not be substituted for information from professionals authorized to practice in your area. You should always consult a suitably qualified professional regarding your specific situation.
