📚 US Tax Guide 2025

Complete guide to understanding US federal and state taxes

🎯 Understanding US Tax Basics

What is Taxable Income?

Your taxable income is your total income minus pre-tax deductions and either the standard deduction or itemized deductions.

Formula: Gross Income - Pre-tax Deductions - Deductions = Taxable Income

Progressive Tax System

The US uses a progressive tax system where different income ranges are taxed at different rates. You don't pay the highest rate on all your income.

🏛️ 2025 Federal Tax Brackets

Tax Rate	Single	Married Filing Jointly	Head of Household
10%	$0 - $11,000	$0 - $22,000	$0 - $15,700
12%	$11,001 - $44,725	$22,001 - $89,450	$15,701 - $59,850
22%	$44,726 - $95,375	$89,451 - $190,750	$59,851 - $95,350
24%	$95,376 - $182,050	$190,751 - $364,200	$95,351 - $182,050
32%	$182,051 - $231,250	$364,201 - $462,500	$182,051 - $231,250
35%	$231,251 - $578,125	$462,501 - $693,750	$231,251 - $578,100
37%	$578,126+	$693,751+	$578,101+

📋 2025 Standard Deductions

Single

$15,000

Married Filing Jointly

$30,000

Head of Household

$22,500

💼 FICA Taxes 2025

Social Security Tax

6.2% on wages up to $176,100 (2025 wage base)

Maximum tax: $10,918.20

Medicare Tax

1.45% on all wages (no limit)

Additional 0.9% on wages over $200,000 (single) or $250,000 (married)

💡 Tax Optimization Strategies

Pre-tax Savings

• Maximize 401(k) contributions ($23,500 limit for 2025)
• Use HSA if available (triple tax advantage)
• Pre-tax health insurance premiums
• Flexible Spending Accounts (FSA)

Deduction Planning

• Compare itemized vs standard deductions
• State and local tax deduction (SALT)
• Charitable contributions
• Mortgage interest deduction

💎 Tax Credits vs Deductions

Tax Credits (Dollar-for-Dollar)

• Child Tax Credit: Up to $2,000 per child
• Earned Income Tax Credit: For low to moderate income
• American Opportunity Credit: Education expenses
• Lifetime Learning Credit: Continuing education
• Child and Dependent Care Credit: Up to $2,100

Tax Deductions (Reduce Taxable Income)

• Mortgage Interest: Up to $750,000 loan
• State and Local Taxes: Up to $10,000 (SALT)
• Charitable Contributions: Cash and property
• Medical Expenses: Over 7.5% of AGI
• Student Loan Interest: Up to $2,500

🏦 2025 Retirement Contribution Limits

401(k) / 403(b)

$23,500

+$7,500 catch-up (50+)

Traditional / Roth IRA

$7,000

+$1,000 catch-up (50+)

HSA

$4,150

$8,300 family coverage

HSA Triple Tax Advantage

Health Savings Accounts offer the best tax benefits available:

✓ Tax-deductible contributions
✓ Tax-free investment growth
✓ Tax-free withdrawals for qualified medical expenses
✓ After age 65, can withdraw for any purpose (taxed as ordinary income)

🗺️ State Tax Landscape 2025

No State Income Tax (9 States)

Alaska, Florida, Nevada

South Dakota, Tennessee

Texas, Washington, Wyoming

New Hampshire (dividends/interest only)

Flat Tax States (8 States)

Colorado (4.4%), Illinois (4.95%)

Indiana (3.23%), Michigan (4.25%)

North Carolina (4.75%)

Pennsylvania (3.07%)

Utah (4.85%)

Highest Tax States

California (up to 13.3%)

Hawaii (up to 11%)

New York (up to 10.9%)

New Jersey (up to 10.75%)

Oregon (up to 9.9%)

📅 Tax Planning Calendar

Key Tax Deadlines

April 15, 2025:

2024 tax return filing deadline

Quarterly Estimated Taxes:

Jan 15, Apr 15, Jun 16, Sep 15

December 31:

IRA/401(k) contribution deadline for current year

Year-End Tax Moves

• Maximize 401(k) and HSA contributions

• Harvest investment losses

• Make charitable donations

• Pay deductible expenses

• Consider Roth conversions

• Review estimated tax payments

• Plan for next year's deductions

❌ Common Tax Myths Debunked

Myth: "I don't want a raise because it will put me in a higher tax bracket"

Reality: Only the additional income is taxed at the higher rate, not your entire income. You always keep more money with a raise.

Myth: "A big refund means I did well on my taxes"

Reality: A large refund means you gave the government an interest-free loan. Adjust your withholding to keep more money throughout the year.

Myth: "I can deduct 100% of business meals"

Reality: Business meals are generally 50% deductible, though some exceptions existed during COVID (check current rules).

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Important: This guide provides general information about US taxes and should not be considered professional tax advice. Tax laws are complex and change frequently. Please consult with a qualified tax professional for personalized advice regarding your specific situation.