On October 22, 2024, the IRS issued Revenue Procedure 2024-40, providing the annual inflation adjustments for tax provisions to be used by individual taxpayers for the 2025 calendar year. The adjustments include the following:
The estate, gift, and generation-skipping transfer tax exemptions for 2025 are $13,990,000, an increase from $13,610,000 for transfers in 2024.
The annual exclusion for gifts is $19,000 for calendar year 2025, an increase from $18,000 for 2024.
For 2025, the first $190,000 of gifts to a spouse who is not a citizen of the United States (other than gifts of future interests in property) are not included in the total amount of taxable gifts made during that year, an increase from $185,000 for 2024.
On November 1, 2024, the IRS released Notice 2024-80, providing annual inflation adjustments for retirement accounts. For 2025, the annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is $23,500, an increase from $23,000 in 2024. However, the limit on annual contributions to an IRA is $7,000 ($8,000 for those 50 and older) for 2025—the same as the contribution limit for 2024.
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