- New beginning in 2025 – a higher catch-up contribution limit of $11,250 applies for 401(k) plan participants ages 60 through 63.
The amount individuals can contribute to a SIMPLE retirement account has increased to $16,500 (up from $16,000) with a catch-up contribution of $3,500 for SIMPLE plan participants ages 50 and over.
- New beginning in 2025 – a higher catch-up contribution limit of $5,250 applies for SIMPLE plan participants ages 60 through 63.
The limit on annual contributions to IRAs remains at $7,000 with a catch-up contribution for individuals aged 50 and over of $1,000 for a total annual contribution limit of $8,000 for those individuals.
The contribution limit for flexible spending accounts (FSAs) that provide reimbursement for medical expenses increases to $3,300 for 2025, up from $3,200 in 2024. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount rises to $660, increasing from $640 in tax year 2024.
The 2025 contribution limit for dependent care flexible spending accounts remains at $5,000.
The annual limit on health savings account (HSA) contributions for employees with self-only coverage will be $4,300. For family coverage, the contribution limit will be $8,550. A health savings account is available to individuals with coverage under a high deductible health plan (HDHP) with a deductible of at least $1,650 for self-only coverage or $3,300 for family coverage.
The Social Security Taxable Wage Base for 2025 will be $176,100, up from $168,600 in 2024. The Social Security tax rate remains 6.2%. There is no limit to the wages subject to Medicare tax, with all wages subject to the 1.45% tax for a combined FICA tax rate of 7.65%. There is an additional 0.9% Medicare tax assessed for employees once their wages exceed $200,000 in a year.
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