Changes to retirement accounts

The Consumer Price Index, the preferred measure of inflation in the US, has risen by 2.9% over the last 12 months (compared to 2.4% this time last year). This means retirement account limits are increasing modestly, and in some cases a bit more than they increased last year.

IRA limits didn’t change at all last year, so a $500 increase is welcome. For those of you contributing to your Roth IRA every month, you will need to invest an even $625 every month to maximize your account. If your New Year’s resolution is to max out your 401(k), you’ll need to contribute a little over $2,000 every month to do so.

One Money Guy metric I like to keep an eye on is the gross income someone needs in order to complete Step 6 of the FOO without contributing more than 25% of their income. Assuming you can’t make catch-up contributions and have a Roth IRA, individual HSA, and a 401(k), in 2026 you would need an income of $145,600 to complete Step 6 of the Financial Order of Operations. This essentially means if you make under that amount, contributing to a 401(k), Roth IRA, and HSA will meet the 25% investing goal. If you make over that amount, you may need to utilize a mega backdoor Roth strategy and/or contribute to a taxable brokerage account.

The income phaseouts for retirement plans are also adjusted each year for inflation. If you are expecting your income to stay the same or decrease next year, you could potentially now qualify for Roth IRA contributions without using the backdoor Roth strategy. If you think your income may be higher than these phaseout limits, it is worth planning ahead and utilizing a backdoor Roth if necessary.

Standard deductions and marginal tax rates

This is a weird year for the standard deduction. Legislation passed in July modestly increased the standard deductions for 2025 (by 5% across the board), so when you file taxes in a few months you can expect to get a little extra back than you would have otherwise. About 91% of taxpayers take the standard deduction instead of itemizing.

Marginal tax rates remain unchanged, but income thresholds are also subject to annual inflation increases. Again, if you are expecting your income to decrease or remain the same next year, this means you will be paying a bit less in taxes, all else being equal.

If you are an accountant or tax enthusiast, you can review the full IRS release of changes next year and their separate release detailing changes to retirement accounts. Make sure to download our 2025 Tax Guide as you prepare your taxes next year, and be on the lookout for our 2026 Tax Guide with all of the changes mentioned here and more.

I’ve had years in college where I only had one job and only had one form to worry about at tax time. Those were the days. Now, I have an entire stack of 1099s, W-2s, and other miscellaneous correspondence I need to file my taxes. It seems like a new form comes in the mail everyday. I’m certainly not looking forward to the work of filing our taxes, but it can be made easier and less stressful. I’ve compiled the top resources for filing your taxes, starting with resources for those with simple returns and gradually building to more advanced tax situations.

1. The Money Guy 2025 Tax Guide

The annual Money Guy Tax Guide has all of the latest inflation-adjusted tax information from the IRS. The free download includes income tax rates, standard deductions, retirement account contribution limits, and Social Security tax information. This guide is a great starting point for those who want to refresh themselves on the tax-filing basics.

2. VITA (Volunteer Income Tax Assistance)

There’s no better free resource than the IRS’s Volunteer Income Tax Assistance (VITA) program. Qualifying taxpayers, including those making under a certain amount, persons with disabilities, and those with limited English-speaking ability, may qualify for assistance filing their taxes. If you think you may qualify, I highly encourage you to check out the IRS VITA page to find a center near you and make an appointment. It’s best to make an appointment sooner rather than later.

In college, I worked in the VITA program and helped local residents file their taxes. Not only was the experience extremely useful, it was really satisfying to help people file their taxes for free. There are many large corporations and businesses out there that want to squeeze every last dollar out of taxpayers, so it was refreshing to provide a valuable service completely free of charge with no strings attached.

3. FreeTaxUSA and IRS Free File partners

We don’t have any affiliation whatsoever with FreeTaxUSA, it’s just the best tool I’ve found to file our taxes. It is significantly cheaper than some other tax-filing services because they don’t spend nearly as much on marketing and advertising. Consequently, not as many Americans are aware of FreeTaxUSA or other software that is just as good (or better) than the big names at a fraction of the price. With FreeTaxUSA, filing your federal income tax return is always free and state returns are under $20, according to their website. FreeTaxUSA is an IRS Free File partner along with several other companies. Check out the other IRS partners for some more tax filing software options.

4. Hire a professional

Unless you are a tax professional yourself, you may get to a certain point where the time and energy required to file your own taxes simply isn’t worth it anymore. There’s also the obvious risk of making a mistake when filing your own taxes that a professional would not have made. When we say a “tax professional,” we usually mean a trusted CPA that is experienced in filing tax returns. If you aren’t sure how to find a trusted CPA, ask friends and family what their experiences are like with their tax professional and if they are taking on new clients. The cost of hiring a CPA to do your taxes might seem expensive at first, but the benefits of having an experienced professional do your taxes can be substantial.

As far as filing my taxes goes, I really miss being in college. I didn’t make much money and only had one job, so filing taxes was super quick and I always got a refund. Now that I’ve gotten older and our tax situation is more complex, I really appreciate the value of high-quality tax-filing software. We are currently in our FreeTaxUSA era, but I have no doubt that if I wasn’t a CFP® professional I would be paying someone else to do our taxes. Even so, I don’t think we will file our own taxes for much longer.

If you aren’t a financial professional but have a simple return, using FreeTaxUSA or other similar software may be a great option for filing your taxes. If you qualify for VITA assistance, I can’t recommend the program enough. If you have a more complicated tax return, it may be a good idea to reach out to a tax professional for assistance. No matter what your tax situation looks like, I wish you a low-stress tax filing season filled with nothing but joy.