WASHINGTON (AP) — The IRS announced Friday an increase in the amount individuals can contribute to their 401(k) plans in 2025 — to $23,500, up from $23,000 in 2024.

THE Internal Revenue Service detailed increases to its annual cost-of-living adjustments for pension plans and other retirement accounts.

Workers who participate in 403(b) and the federal Thrift Savings Plan will also be able to increase their annual contribution to $23,500 in 2025, up from $23,000 in 2024.

Some annual contributions remain the same. The annual IRA contribution limit will remain at $7,000 and the IRA catch-up contribution limit for people age 50 and older remains at $1,000 for 2025.

The agency announced increases to the standard deduction last week in its annual report inflation adjustments for 2025. For single taxpayers and married individuals filing separately in tax year 2025, the standard deduction increases to $15,000, an increase of $400 from 2024.

For couples filing jointly, this standard deduction will be $30,000 for 2025, an increase of $800 from the previous year. And heads of household will benefit from a standard deduction of $22,500, up $600 from 2024.

The income thresholds for the seven federal tax brackets have also been revised upwards.

Last month, the Social Security Administration announced a Cost of living increase of 2.5% for beneficiaries from January. That translates to an average increase of more than $50 on millions of people’s monthly checks.

Close

Thank you for registering!

Watch for us in your inbox.

Subscribe now

Copyright 2024 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

For breaking news, weather, sports and streaming video, visit WPRI.com.