George Kamel: Save With These 8 Big Tax Changes for 2025
Written by
Ashley Donohoe
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Zuri Anderson
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If you just filed or you’re racing to meet the 2024 tax return deadline, next year’s return might be the last thing on your radar. However, learning about the 2025 federal tax changes can help you estimate how much in taxes you’ll owe over the year and take advantage of strategies that save you money.
A recent YouTube video from money expert George Kamel broke down eight big tax changes for 2025. Learn more about how each could impact you.
Higher Standard Deduction
While itemizing deductions is sometimes worth it, Kamel explained that most Americans go the easier and often more profitable route of taking the standard deduction. You can reduce your taxable income with these slightly higher standard deduction amounts for 2025:
- Single or married filing separately: $15,000
- Head of household: $22,500
- Married filing jointly: $30,000
Plus, you could get a special standard deduction boost of $1,600 to $4,000 if you or your spouse are blind, at least age 65 or both.
Updated Tax Brackets
While the tax rates of 10% to 37% still apply in 2025, the income brackets have slightly changed. You can check this IRS document to find your tax bracket by filing status.
“These adjustments help prevent something called bracket creep, where inflation pushes you into a higher tax bracket even though your purchasing power has not changed,” Kamel said.
If your income is relatively stable, you might save. For example, if you’re single with a taxable income of $47,500, you’ve moved from the 22% bracket in 2024 to the 12% bracket in 2025.
Bigger Earned Income Tax Credit (EITC)
You might get the EITC if your income is what the IRS considers “low to moderate” and you meet various requirements. The IRS raised the potential maximum EITC to between $649 and $8,046, depending on how many qualifying children or relatives you have.
Since this credit can be complex to figure out, check out the IRS EITC assistant once it updates for 2025. Kamel highlighted that this is one of the IRS credits that can give you a larger refund.
Raised Alternative Minimum Tax (AMT) Exemptions
“Basically, if your regular tax bill gets too low thanks to deductions and credits, the AMT kicks in to make up the difference,” Kamel said.
If you’re a high earner, higher AMT exemptions could give you some relief on next year’s return. The IRS noted these amounts jumped to $88,100 for single taxpayers, $68,650 for married couples filing separately and $137,000 for joint filers. There are also new phase-out amounts of $626,350 to $1,252,700 (based on your filing status).
Higher Flexible Spending Account (FSA) Limits
FSA accounts through your employer are nice since you can use the money for out-of-pocket costs, like doctor’s copays and medicines, and not pay taxes on what you contribute.
Kamel said that the annual FSA contribution limit for 2025 went up by $100 to $3,300. Plus, you can carry over $660 that you don’t use this year.
Higher 401(k) Contribution Limit
If you’re stashing away funds for retirement, some good news is that the 2025 401(k) contribution limit rose by $500 to $23,500. You can add $11,250 to that if you’re 60 to 63 years old or $7,500 if you’re at least 50 but outside that special range.
Kamel explained how traditional 401(k) contributions can help you cut your tax bill for 2025. If you make $70,000 but contribute $10,000 to your traditional 401(k), only $60,000 would be taxable. But he also advised keeping the future in mind.
“Since you’re not paying taxes on the money you put into these traditional accounts, you’ll pay taxes on that money and its growth when you take it out in retirement,” Kamel explained.
Raised Estate and Gift Tax Exemptions
Since gift and estate taxes can be up to 40%, you or your loved ones could save big with the federal estate and gift tax exemptions. Kamel discussed the $1,000 increase to $19,000 for the per-person annual exclusion in 2025 and the higher $13.99 million lifetime estate tax exclusion.
Just keep in mind that state taxes may apply even for transfers within these federal exemption limits.
Bigger Adoption Tax Credit
If you’re working toward an adoption, the higher adoption credit in 2025 could help you out. The maximum amount jumped by $400 to $17,280. However, this isn’t a refundable credit.
Like the EITC, this credit has many IRS rules you have to meet. Not all adoption types qualify, and only certain expenses count, such as adoption fees, court costs and legal fees.
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