2025 Tax Cheat Sheet: What You Need to Know This Year

By Jerry Williams, MS-PFP | Pink Money Podcast

Every January, the IRS rolls out tax law adjustments that affect nearly all of us — whether you’re retired, working overtime, or hustling on tips. With over 60 changes in effect for 2025, it can feel overwhelming. That’s why I created the 2025 Tax Cheat Sheet: a one-page, printable guide to the most important numbers you need this year.

Below, I’ll highlight some of the key updates — plus explain a couple of tricky areas that always spark questions: how Social Security is taxed and what really happens with overtime and tips.

📊 Key 2025 Tax Updates

• Standard Deduction (2025):

  • $15,000 for single filers

  • $30,000 for married couples filing jointly

  • $22,500 for heads of household

• Tax Brackets: Still 7 brackets, ranging from 10% to 37%, but the income thresholds have shifted upward due to inflation indexing.

• IRA/Roth IRA Contributions: $7,500 limit ($8,500 if age 50+).

• 401(k)/403(b) Contributions: $24,000 limit ($31,500 if age 50+).

• Gift Tax Exclusion: $18,500 per recipient.

• Estate Tax Exemption: $13.9M per individual.

• 👉 For the full breakdown, download the 2025 Tax Cheat Sheet PDF (free).

💵 How Social Security Is Taxed

Many retirees are surprised to learn that their Social Security (SS) benefits may be partially taxable. It depends on your combined income (adjusted gross income + nontaxable interest + ½ of your SS benefits).

• If combined income is below $25,000 (single) or $32,000 (married) → no tax on benefits.

• Between $25,000–$34,000 (single) / $32,000–$44,000 (married) → up to 50% of benefits taxable.

• Above $34,000 (single) / $44,000 (married) → up to 85% of benefits taxable.

Bottom line: Social Security isn’t automatically tax-free. If you’re planning withdrawals from retirement accounts, timing matters.

⏱ Taxes on Overtime & Tips

Another common frustration: “Why does overtime feel like it’s taxed more?”

Here’s the truth: overtime and tips are taxed the same as regular wages. What often makes it feel worse is:

1. Withholding formulas – Your employer may withhold more federal tax in the paycheck where OT or tips are reported, making your check look smaller.

2. Tax bracket creep – Extra income can push part of your wages into the next bracket. Not your whole income, just the portion above the threshold.

Tips are also 100% taxable. Employers are required to report and withhold taxes on declared tips, even if you take them home in cash.

👉 Pro tip: Keep records of tips and use a budgeting app or notebook so you’re not caught off guard at tax time.

🌈 Why This Matters

Whether you’re navigating retirement decisions, working extra shifts, or planning for your legacy, understanding these tax shifts can save you stress (and money). The IRS isn’t exactly known for making things simple — that’s why I put together resources like this.

📌 Action Step:
Download your free 2025 Tax Cheat Sheet PDF and keep it handy. Share it with friends, family, and colleagues — because a little preparation goes a long way.

👉 Download the Cheat Sheet