The year-end newsletter full of tax advice is available upon request. Please call the office at (201)797-4761 for your complimentary copy! 1.  In regard to retirement plans, the maximum contribution limits for 2025 are outlined below:                             Traditional & Roth IRA's for Taxpayers under 50  $  7,000                     Traditional & Roth IRA's for Taxpayers over 50  $  8,000                    401K's for Taxpayers under 50  $23,500                    401K's for Taxpayers over 50  $31,000                    SEP & Defined Contribution Plans for Taxpayers under  50  $70,000                    SEP & Defined Contribution Plans for Taxpayers over 50  $70,000 2.  For 2025 the IRS allows a deduction for your automobile at various rates depending on the usage.  The details are outlined below:                      Car used for business  70 cents per mile                      Car used for charitable purposes  14 cents per mile                       Car used for medical or moving purposes  21 cents per mile                   3. Child care tax credits for summer day camp and babysitters are still available for children under 13 years of age if both parents work. 4.  In regard to the "kiddie" tax the law increases the age from 14 to 18 regarding investment income.  If the child is under 25 and still in college and they have investment income of over $2,700 they will be taxed at their parents' rate instead of the individual rate.  5.  The minimum corporate tax in New Jersey is based on gross receipts and ranges from $500 to $2,000 for 2025. 6.  The New Jersey Homestead rebates for a homeowner has been replaced by PAS-1 and Anchor Benefit and now range from $1,000 to $1,750 for 2025.   7.  The threshold for the deduction of unreimbursed medical expenses has been changed to 7.5% of your adjusted gross income.  8.  The tax rate on dividend income is generally 15% for 2025.  However, if in the top tax bracket then the rate is 20%.  9.  The maximum tax rate on capital gains is 15% for 2025 if your taxable income is under $588,750 on a joint return.  If over $588,750, the capital gain rate rises to 20%.  10.  A Medicare  surtax of 0.9% will be assessed on W-2 employee compensation or self-employment income if you earn over $250,000 on a joint return.  11.  There is a 3.8% Medicare surtax on net investment income.  12. For flexible spending accounts (FSA) over the counter medications are no longer eligible.  In 2025, the maximum annual FSA contribution for each employee will be capped at $3,300. 13. Under the American Opportunity Tax Credit there is a $2,500 maximum credit for qualified higher education expenses such as college. However the credit phases out for married couples earning over $160,000. 14. In 2025, there are no estate taxes at the federal level unless your estate is over $14 million.  In New York the estate must be over $6,940,000 in order to be taxed.   The annual gift tax exclusion is $19,000 per donee in 2025.       The estate tax has been eliminated in New Jersey.  However, the New Jersey Inheritance tax will remain in effect with no change during the same time period.  This is a tax assessed on transfers to beneficiaries other than spouses, parents, or children.  Therefore, it would be imposed on nieces, nephews, siblings and friends.  The New Jersey Inheritance tax rates range from 11% to 16% based on taxable income.  15.  There is no limit on itemized deductions in 2025. 16.  The Social Security wage base has increased to $176,100 for 2025.  If you start collecting Social Security at age 62, you will be subject to a 25% discount.  If you are between the age of 62-66, you can earn up to $21,240 before losing any benefits.  There is no income restriction of social security benefits after age 66. 17.  In 2025, contributions to HSA Plans is now $4,300 for individuals and $8,550 for family coverage.  If over 55, you can deduct an additional $1,000. 18.  There will be an increase in the New Jersey Gross Income Tax exclusion for pension and retirement income to $150,000 on a joint return.  19.   The New Jersey sales tax is 6.625% for 2025.      Tax Cuts & Jobs Act - 2017 (Updated 2025) The tax law called "Tax Cuts & Jobs Act" was passed by Congress at the end of 2017. This  law creates numerous tax saving opportunities for individuals and businesses. Some of the new laws are simple and others are very complex. I have outlined below the highlights of this recently passed tax legislation.   Individuals 1. The new law provides for the same number of tax brackets but with lower rates. The highest tax rate has been reduced from 39.6% to 37%. 2. The personal and dependent exemptions which were $4,050 each have been eliminated. 3. The child tax credit for those under 17 has been reduced to $2,200 per child. The income level at which the credit begins to phase out also increases allowing more taxpayers to benefit. 4. The standard deduction has increased to $15,750 for single filers and $31,500 for married couples. If over 65, there is an additional $1,600 per person. See item #18 for additional $6,000 deduction. 5. The maximum deduction for state and local income taxes and property tax has been increased to $40,000 from $10,000. 6. The mortgage interest deduction has been limited to those loan balances up to $750,000 for debt incurred after 12/15/17 which is used to buy, build, or improve your primary or secondary home. 7. The interest deduction on home equity loans has been changed. Interest paid on these loans for money used to buy, build, or improve a taxpayer's home is still deductible.  However, if the money from these loans is used for personal reasons such as paying off credit card debts or buying a car, it is not deductible.  If you convert these loans to a first mortgage then if becomes 100% deductible. 8. The threshold for deducting medical expenses has been decreased from 10% to 7.5% of your adjusted gross income for 2025. 9. The following miscellaneous deductions are no longer deductible in 2025:          a. Unreimbursed business expenses          b. Fees for investment advice          c. Union dues          d. Legal fees related to divorce or producing income          e. Safe deposit box fees          f. Tax Preparation fees          g. Uniforms 10. Alimony payments will no longer be deductible by the payer and taxable income to the recipient for any divorce agreements that were entered into after 12/31/18. 11. The moving expense deduction has been eliminated for everybody except military personnel. 12. The investment income of a child known as the "Kiddie Rate" will be taxed at trust income tax rates which are higher than the old income tax rates. 13. In 2025 the 529 Plans can now be used for private or religious school tuition grades K-12, in addition to college. 14. The new law increases the estate tax exclusion to $15 million for individuals. Therefore, fewer estates will be subject to taxation. 15. The gift tax exclusion is $19,000 per year per donee in 2025. 16. The Alternative Minimum Tax (AMT) has not been repealed but they have increased the exemptions which mean less people will be subject to it in 2025. 17. The individual mandate to purchase health insurance under Obamacare has been repealed for 2025. 18. The new tax bill passed in 2025 is called “ One Big Beautiful Bill Act”, Some of the highlights are noted below:   1.The standard deduction is increasing to $15,750 for single filer and $31500 for joint filers. 2. The new law provides an extra $6,000 deduction for taxpayers 65 and older if modified adjusted gross income is under $150,000 and partial deduction if under $250,000. 3. State and local real estate taxes can be deducted up to $40,000, subject to modified adjusted gross income under $500,000 on joint return. 4. The child tax credit increased from $2,000 to $2,200 for joint filers under $400,000 in MAGI. 5. Interest on car loans are deductible up to $10,000 in 2025 for cars assembled in the US. 6. Charity deductions are available for non-itemizers up to $2,000. 7. Tips are deductible up to $25,000 for joint filers, earning up to $300,000. 8. Overtime pay is deductible up to $25,000 for joint filing earning less than $300,000. 9. The new law creates “Trump accounts” for children born between 2025-2028. These accounts will function like an IRA and are funded with $1000 from Uncle Sam.    Businesses   1. The maximum tax rate for corporations has been reduced from 35% to 21%. 2. There is a new deduction called QBI of 20% for pass through entities such as S-Corps, Partnerships and Sole Proprietors. Certain types of service businesses such as doctors, accountants, and lawyers are excluded from this deduction if the income for single filers is over $232,100 and $464,200 for married filing jointly. The deduction is also limited to the higher of 50% of W-2 wages paid or 25% of wages paid plus 2.5% of unadjusted basis of depreciable assets. 3. The deduction for entertainment expenses has been eliminated. However, the deduction for meal expenses has been reduced to the rate of 50% and has been expanded to include meals provided on the premises of the employer. 4. The deduction for the purchase of equipment known as section 179, has been increased to $1,220,000 in order to accelerate your write off in the first year. 5. There will be a reduced rate for repatriation of foreign source income being returned to the US. The rate is 15.5% for liquid assets + 8% for illiquid assets.   Please adjust your W-4 form or your estimated taxes based upon the information above.   If you have any questions, please don't hesitate to call me.