February 21, 2025

Tax Planning and Individual Deductions for 2025

Article Summary:

This blog offers insights into effective tax strategies and deductions available to individuals for the 2025 tax year. Key points include:

Tax Planning Strategies: Emphasizes the importance of proactive tax planning to legally reduce tax liabilities through deductions, credits, and other mechanisms.
Individual Deductions: Highlights various deductions taxpayers can claim, such as those related to medical expenses, mortgage interest, charitable contributions, and state and local taxes. It also notes that while the Tax Cuts and Jobs Act of 2017 suspended certain miscellaneous itemized deductions through 2025, many other deductions remain available.
Retirement Account Contributions: Discusses the benefits of contributing to tax-advantaged retirement accounts like traditional and Roth IRAs, including contribution limits and tax implications for the 2025 tax year.

Staying informed about current tax laws and consulting with tax professionals will optimize tax outcomes and ensure compliance with evolving regulations.

Legal Topics

2025 Tax Deductions, Tax Attorney, Tax Compliance, Tax Planning,

EMPLOYMENT LAW UPDATE: FEDERAL TRADE COMMISSION ELIMINATES NON-COMPETE CLAUSES

On Tuesday, the Federal Trade Commission issued a new Rule putting an end to employment-related non-compete clauses. In its justification for the rule, the FTC called non-compete clauses “an unfair method of competition” and stated it is a “violation for [employers] to… enter into non-compete clauses (“non-competes”) with workers.” In today’s very competitive labor market, the new FTC Rule creates a significant disruption for employers.

WHEN IS THE FTC ELIMINATION OF NON-COMPETE CLAUSES SET TO TAKE EFFECT?

This new FTC provision—set to take effect in 120 days—renders existing non-compete agreements unenforceable. Existing non-compete agreements with senior executives will remain enforceable, although employers cannot require newly hired senior executives to sign such an agreement.

WHAT REQUIREMENTS HAS THE FTC IMPOSED ON EMPLOYERS BY ELIMINATING NON-COMPETE CLAUSES?

After the Rule takes effect, employers are required to deliver personal notice to employees (past and present) who signed a non-compete agreement informing them agreements are no longer enforceable. In the notice, employers must inform employees they are free to accept any job or start any business, even if it is directly competitive with the employer.

IS THE FTC’S ELIMINATION OF THE NON-COMPETE CLAUSES OPTIONAL FOR EMPLOYERS?

Compliance with the FTC Rule is not optional. Employers should consider new ways they can protect against a former employee gaining a competitive advantage by using the employer- provided training, the relationships made possible by the employer, or the confidential information learned from the employer. RMP can assist you in navigating this disruption and can provide advice on how to most effectively protect your vital business interests going forward.

Photo of the door to RMP Employment Law Attorneys Arkansas

RMP: Your Employment Law Attorneys

RMP Attorneys At Law has an experienced Employment Law Attorney team dedicated to helping you navigate these changes. If you have any questions or would like guidance, reach out to one of our employment attorneys, Tim Hutchinson, Seth Haines, Larry McCredy, or Taylor Baltz or call 479.443.2705.

It's the start of the new year and a great time to start planning for your 2025 taxes. Strategic tax planning can significantly enhance your financial well-being. Understanding the basics of tax planning and exploring potential deductions can help you minimize your tax liability and, in turn, maximize available financial opportunities.

What Is Tax Planning?

Tax planning involves evaluating your financial situation and making intentional decisions to maximize deductions, credits, and other benefits allowed under the tax law. Tax planning includes:

Strategizing Throughout the Year: Tax planning isn't a one-time activity reserved for tax season. Through proactive planning, you can optimize your financial moves to align your financial decisions with available tax benefits.
Reducing Tax Liability: Identifying ways to reduce your taxable income for the year by applying credits and deductions and, when possible, carefully timing when you recognize income or incur deductible expenses.
Ensuring Compliance: Staying within the guidelines set by the IRS while optimizing your financial outcomes.

Effective tax planning considers significant life events, changes in income, and evolving tax laws. For example, the 2017 Tax Cuts and Jobs Act, which introduced many significant changes to federal tax law, is currently set to expire at the end of 2025, so taxpayers will soon need to evaluate the impact of the provisions which are expected to sunset. Whether you file taxes as a single taxpayer, a member of a family, or even a business owner, tax planning is crucial for securing your financial future.

Tax deduction notebook with orange calculator on left hand side and pen with folded 100 dollar bill on right side.

Key Personal Tax Deductions for 2025

Understanding and evaluating available deductions can significantly reduce taxable income for individuals and families. One of the most fundamental decisions each taxpayer must make is whether to itemize deduction or to take the standard deduction. Using the most current 2024 guidelines, here are some of the most impactful deductions to consider:

Standard Deduction:

The IRS regularly adjusts the standard deduction to account for inflation. For 2024, the amounts are:
- $14,600 if you file single or married filing separately.
- $29,200 for married couples filing jointly.
- $21,900 for heads of household.
For 2025, these amounts will be:
- $15,000 if you file single of married filing separately.
- $30,000 for married couples filing jointly.
- $22,500 for heads of household.
If you don't itemize deductions, this is the default amount you'll subtract from your adjusted gross income to arrive at your taxable income.

Mortgage Interest Deduction:

If you itemize deductions and you own a home, you can deduct interest paid on your mortgage, subject to limits based on the size of your loan and when you obtained it.

State and Local Taxes (SALT) Deduction:

If you itemize deductions, you can deduct up to $10,000, or $5,000 if you are married and filing separately, in state and local property taxes, income taxes, or sales taxes.

Charitable Contributions:

Donations made to qualified charitable organizations are deductible, subject to certain percentage limitations, if you itemize. For gifts of $250 or more, be sure to keep records of your contributions, including receipts and written acknowledgments of your donations.

Retirement Contributions:

Contributions to traditional IRAs or certain employer-sponsored plans like 401(k) plans may be deductible or otherwise not taken into account for purposes of determining your taxable income, depending on your income and filing status. This deduction is available if you take the standard deduction or you itemize.

Medical and Dental Expenses:

If you itemize and your unreimbursed medical expenses exceed 7.5% of your adjusted gross income (AGI), you can deduct the excess of such expenses.

Education-Related Credits and Deductions:

Certain tuition and fees may be deductible in certain circumstances, and you can explore credits like the Lifetime Learning Credit or the American Opportunity Credit for additional savings.

Home Office Deduction:

If you're self-employed and use a portion of your home exclusively for business purposes, you may qualify to deduct certain expenses such as utilities and maintenance, that are attributable to that portion of your home.

How to Maximize Tax Savings

Stay Organized: Keep meticulous records of income, expenses, and supporting documents for deductions and credits.

Understand Deadlines: Contributions to retirement accounts and certain deductions may involve deadlines that extend beyond December 31.

Work with a Professional: A tax professional can help you understand complex tax laws and identify opportunities tailored to your situation.

Use Tax Software or Tools: Reliable tax preparation software can guide you through deductions and credits while ensuring accuracy.

Family of four, mom and dad side by side with their young daughters on their back, together in a park smiling after making intentional financial decisions through tax planning to benefit their future.

Plan Today for a Better Tomorrow

Tax planning isn’t just about filing your tax returns—it’s about making intentional financial decisions that benefit your future. You can take control of your taxes and make the most of the year ahead by staying informed about available deductions and working with a tax professional to implement a clear strategy.

If you're uncertain where to begin, consult an RMP tax professional to tailor a plan that aligns with your goals and circumstances. Contact us today!

RMP Tax Law & Tax Planning Lawyers

Adam C Flock

Tax Law

Denton Woods

Tax Law & Tax Planning

Hunter Bedell

Tax Law & Tax Planning

Estate Planning Lawyer in Arkansas, RMP Law

John Neihouse

Tax Law & Tax Planning

Kasper Huber

Tax Law & Tax Planning

Neal Pendergraft

Tax Law & Tax Planning

Taylor Baltz

Tax Law & Tax Planning

Alex Miller

Tax Law & Tax Planning

Hannah Van Horn

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John Lessel

Tax Law & Tax Planning

Joseph D. Reece

Tax Law & Tax Planning

Lee Moore

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Sierra N Glover

Tax Planning

It's the start of the new year and a great time to start planning for your 2025 taxes. Strategic tax planning can significantly enhance your financial well-being. Understanding the basics of tax planning and exploring potential deductions can help you minimize your tax liability and, in turn, maximize available financial opportunities.

What Is Tax Planning?

Tax planning involves evaluating your financial situation and making intentional decisions to maximize deductions, credits, and other benefits allowed under the tax law. Tax planning includes:

Strategizing Throughout the Year: Tax planning isn't a one-time activity reserved for tax season. Through proactive planning, you can optimize your financial moves to align your financial decisions with available tax benefits.
Reducing Tax Liability: Identifying ways to reduce your taxable income for the year by applying credits and deductions and, when possible, carefully timing when you recognize income or incur deductible expenses.
Ensuring Compliance: Staying within the guidelines set by the IRS while optimizing your financial outcomes.

Effective tax planning considers significant life events, changes in income, and evolving tax laws. For example, the 2017 Tax Cuts and Jobs Act, which introduced many significant changes to federal tax law, is currently set to expire at the end of 2025, so taxpayers will soon need to evaluate the impact of the provisions which are expected to sunset. Whether you file taxes as a single taxpayer, a member of a family, or even a business owner, tax planning is crucial for securing your financial future.

Key Personal Tax Deductions for 2025

Understanding and evaluating available deductions can significantly reduce taxable income for individuals and families. One of the most fundamental decisions each taxpayer must make is whether to itemize deduction or to take the standard deduction. Using the most current 2024 guidelines, here are some of the most impactful deductions to consider:

Standard Deduction:

The IRS regularly adjusts the standard deduction to account for inflation. For 2024, the amounts are:
- $14,600 if you file single or married filing separately.
- $29,200 for married couples filing jointly.
- $21,900 for heads of household.
For 2025, these amounts will be:
- $15,000 if you file single of married filing separately.
- $30,000 for married couples filing jointly.
- $22,500 for heads of household.
If you don't itemize deductions, this is the default amount you'll subtract from your adjusted gross income to arrive at your taxable income.

Mortgage Interest Deduction:

If you itemize deductions and you own a home, you can deduct interest paid on your mortgage, subject to limits based on the size of your loan and when you obtained it.

State and Local Taxes (SALT) Deduction:

If you itemize deductions, you can deduct up to $10,000, or $5,000 if you are married and filing separately, in state and local property taxes, income taxes, or sales taxes.

Charitable Contributions:

Donations made to qualified charitable organizations are deductible, subject to certain percentage limitations, if you itemize. For gifts of $250 or more, be sure to keep records of your contributions, including receipts and written acknowledgments of your donations.

Retirement Contributions:

Contributions to traditional IRAs or certain employer-sponsored plans like 401(k) plans may be deductible or otherwise not taken into account for purposes of determining your taxable income, depending on your income and filing status. This deduction is available if you take the standard deduction or you itemize.

Medical and Dental Expenses:

If you itemize and your unreimbursed medical expenses exceed 7.5% of your adjusted gross income (AGI), you can deduct the excess of such expenses.

Education-Related Credits and Deductions:

Certain tuition and fees may be deductible in certain circumstances, and you can explore credits like the Lifetime Learning Credit or the American Opportunity Credit for additional savings.

Home Office Deduction:

If you're self-employed and use a portion of your home exclusively for business purposes, you may qualify to deduct certain expenses such as utilities and maintenance, that are attributable to that portion of your home.

How to Maximize Tax Savings

Stay Organized: Keep meticulous records of income, expenses, and supporting documents for deductions and credits.

Understand Deadlines: Contributions to retirement accounts and certain deductions may involve deadlines that extend beyond December 31.

Work with a Professional: A tax professional can help you understand complex tax laws and identify opportunities tailored to your situation.

Use Tax Software or Tools: Reliable tax preparation software can guide you through deductions and credits while ensuring accuracy.

Plan Today for a Better Tomorrow

Tax planning isn’t just about filing your tax returns—it’s about making intentional financial decisions that benefit your future. You can take control of your taxes and make the most of the year ahead by staying informed about available deductions and working with a tax professional to implement a clear strategy.

If you're uncertain where to begin, consult an RMP tax professional to tailor a plan that aligns with your goals and circumstances. Contact us today!