On October 22, 2024, the U.S. Internal Revenue Service (IRS) released the annual inflation adjustments to be used by individual taxpayers on their 2025 returns (that is, the returns that are generally filed in 2026).1 Over 60 tax provisions were updated, including tax rates and thresholds applicable to all taxpayers and certain provisions applicable to international assignees and expatriates. Additionally, on November 1, 2024, the IRS released the annual inflation adjustments applicable to 401(k) plans, IRAs, and other retirement savings and pension vehicles.2
In addition to the IRS releases, the U.S. Social Security Administration (SSA) announced3 on October 10, 2024, that the maximum amount of wages subject to the Social Security tax will increase from $168,600 to $176,100 in 2025. This 4.4-percent increase is slightly smaller than the 5.2-percent increase of the prior year. The press release was accompanied by a fact sheet outlining the inflation adjustments to other key social security thresholds and limitations.4