Intro
Each year brings updated contribution limits and tax thresholds — but most investors don’t miss the numbers.
They miss how those numbers affect their next decision.
Below is a practical reference guide to key 2025 limits and where they tend to matter most.
> 401(k) Contribution Limits (2025)
- Employee contribution: $23,000
- Age 50+ catch-up: $7,500
(Source: IRS Notice 2024-80)
Key deadline
- December 31, 2025— employee salary deferrals must be made through payroll by year-end
- Employer contributions may be made up to the employer’s tax filing deadline (including extensions)
Why timing matters:
Unlike IRAs, most 401(k) contributions cannot be made after year-end, which is a frequent planning miss. High earners often leave unused tax deferral on the table late in the year.
Common miss:
Front-loading bonuses without checking plan percentage caps.
>IRA Contribution Limits (2025)
- Traditional & Roth IRA: $7,000
- Age 50+ catch-up: $1,000
Key deadline
- April 15, 2026— deadline to make 2025 IRA contributions
Important watchpoint:
Income phaseouts may limit direct Roth eligibility for higher earners.
>HSA Contribution Limits (2025)
- Individual: $4,150
- Family: $8,300
- Age 55+ catch-up: $1,000
Key deadline
- April 15, 2026— deadline to fund 2025 HSA contributions
Why this matters:
HSAs are one of the few accounts offering triple tax advantages, but many eligible households underfund them.
>Annual Gift Tax Exclusion
- Annual gift exclusion: $18,000 per recipient
Key deadline
- Gifts must be completed byDecember 31, 2025 to count for the 2025 tax year
- Gift tax returns (if required) dueApril 15, 2026
Planning note:
Structured annual gifting is often underutilized in multigenerational planning.
>Federal Estate & Gift Exemption (2025)
Exemption
- $13.61 million per individual
- $27.22 million per married couple
Key timing note
Current exemption levels are scheduled to sunset after 2025 unless extended by Congress.
>Long-Term Capital Gains (Forward Planning)
2025 gains are now locked in.
However, capital gains planning remains an important part of:
- portfolio rebalancing
- withdrawal sequencing
- liquidity planning
- and 2026 tax positioning
Key forward watchpoint
Gains realized during 2026 will determine next year’s tax outcome.
Cottonwood Perspective
Contribution limits are useful — but the real value comes from coordinating how they work together across:
- retirement savings
- taxable accounts
- equity compensation
- and long-term transfer planning
If you’d like to discuss how these limits may apply to your situation, we’re available for a conversation.
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Disclosures:
Content is for informational purposes only. Neither the information nor any opinion expressed in this video constitutes an offer by Cottonwood Wealth Strategies to buy or sell any securities or financial instruments, or to provide any investment advice or service.
Cottonwood Wealth Strategies does not provide legal, tax, or accounting advice.