10 New Life and Health Tax Numbers to Know for 2025

2025 over a picture of the IRS headquarters

The Internal Revenue Service has updated the parameters that will shape clients' life insurance, health insurance and estate planning moves in 2025.

A new IRS guide, Revenue Procedure 2024-40, adjusts hundreds of minimums, maximums and rates for inflation.

Much of the guide focuses on basic tax parameters, such as the standard deduction and the minimum income for entering the top income tax bracket: The standard deduction for married individuals filing joint returns will increase to $30,200, from $29,200, and the minimum income for belonging in the tax marginal tax rate bracket will rise to $751,600, from $731,200, for married couples filing jointly.

Here's a look at 10 2025 adjustments related to life and health planning.

The parameters listed here will increase by an average of 2.6% between 2024 and 2025.

That compares with an average increase of 3.7% for the same parameters between 2023 and 2025.

Numbers for Life Insurance and Estate Planning

1. Unified Credit Against Estate Tax

The credit will increase to $13.99 million for a decedent dying in 2025, from $13.61 million for a decedent dying in 2024.

2. Gift Tax Exclusion

The exclusion for 2025 will be $19,000 for gifts to any person, and $190,000 for gifts to a spouse who is not a citizen of the United States. That compares with 2024 limits of $18,000 for gifts to any person, and $185,000 for gifts to a non-U.S. citizen spouse.

3. Valuation of Qualified Real Property in a Decedent's Gross Estate

If a property owner dies in 2025, and the executor of the estate chooses to use a special valuation method for real estate, that approach can reduce the value of the property by a maximum of $1.42 million. For a property owner who dies this year, the maximum impact of that approach is $1.39 million.

4. Estate and Trust Income Tax Rates

The cutoff for the maximum rate is $15,650, and the amount owed on the portion over the cutoff is 37% of the excess plus $3,777.

For 2024, the cutoff for the maximum rate is $15,200, and the amount owed is 37% of the excess plus $3,659.50.

Numbers for Health Insurance and Benefits

5. Cafeteria plans

The dollar limit for voluntary employee salary reductions for contributions to health flexible spending arrangements (FSAs) will increase to $3,300, from $3,200. The maximum amount of unused value that can be carried over to the next year will increase to $660, from $640.

6. Medical Savings Accounts

The MSA is the ancestor of the HSA and a sibling of the health reimbursement arrangement.

An MSA holder must combine high-deductible health coverage with a special savings account.

For 2025, the acceptable deductible ranges will be $2,850 to $4,300 for self-only coverage, and $5,700 to $8,550 for family coverage, For 2024, the acceptable deductible ranges are $2,800 to $4,150 for self-only coverage, and $5,550 to $8,350 for family coverage.

The maximum annual out-of-pocket expense limits will increase to $5,700 for individuals and $10,500 for families, from $5,550 for individuals and $10,200 for families.

7. Qualified Small Employer Health Reimbursement Arrangement

The maximum eligible employer reimbursement amounts for this program will increase to $6,350 for individual coverage and from $12,800 for family coverage, from $6,150 for individual coverage and $12,450 for family coverage.

Numbers for Long-Term Care Planners

8. Eligible Long-Term Care Premiums

Clients who have high enough medical bills to benefit from itemizing their medical expenses can include at least some of their private long-term care insurance premiums in their medical expense total.

The amounts that can be included in the medical expense total vary by age.

For 2024, the amounts went down, apparently because of the effect of the COVID-19 pandemic on long-term care insurance claims and premiums.

In 2025, the amounts will go up.

Here's how the 2025 "includible" premium levels compare with the 2024 levels:

40 or under: will increase to $480, from $470.
More than 40 and up to 50: will increase to $900, from $880.
More than 50 and up to 60: will increase to $1,800, from $1,760.
More than 60 and up to 70: will increase to $4,810, from $4,710.
70 and older: will increase to $6,020, from $5,880.

9. The Qualified Long-Term Care Insurance Contract or Life Insurance Contract Per Diem Limitation

The dollar limit on the benefits will increase to $420 per day, from $410 per day.

Legislative Advocacy

10. Reporting Exception Limit

The IRS offers a reporting exception for some tax-exempt organizations with nondeductible lobbying expenditures.

The reporting exception limit will increase to $143 or less for 2025, from $140 or less for 2024.

Credit: ALM

10 New Life and Health Tax Numbers to Know for 2025