2025 New Year Updates & Reminders
As we kick off the New Year, we wish to provide you with a checklist of financial updates and reminders to assist you with starting off the new year on a positive note. Know that we are here as a resource to further talk through the following items if you have questions or need additional clarifications.
1. Q4 Federal Tax Payment: This is a helpful reminder, for those making quarterly tax payments, that fourth quarter tax payments are due by January 15th. If you need additional assistance to make this payment, please Click Here for additional guidance on making federal tax estimates.
Important: Please remember to select “2024” from the drop-down menu to ensure it is appropriately applied against 2024 taxes due.
2. New Legislation – Social Security Fairness Act: Important update for those retirees who’s Social Security income (SSI) is affected by either the Windfall Elimination Period (WEP) or the Government Pension Offset (GPO) provisions. Congress passed, late December, the Social Security Fairness Act which repeals both the WEP and GPO, allowing those affected to receive their full SSI benefits.
This piece of legislation, as of the time of this writing, has not yet been signed by President Biden into law but is expected to, given its large bi-partisan congressional support. Meaning, this will likely take effect at some point during this year.
It would appear that no action is, currently, required of taxpayers, but will rather be automatically updated for all those affected. The Social Security Administration’s office staff is expected to complete the work needed to make these adjustments on behalf of the taxpayer.
3. Social Security Cost of Living Adjustments (COLA): Starting this month, for those who are currently receiving Social Security income, you can anticipate seeing a modest 2.5% increase in your monthly check. This annual adjustment is meant to offset some of the inflationary pressures we experienced throughout last year.
4. Medicare Part B Premiums: Separately, note the base cost of Medicare Part B premiums are increasing by $10.30 — now at $185 per month starting January. As a side note, the monthly cost of Medicare Part B & D premiums is income adjusted, meaning the more income you report the larger the monthly premium. See below for a chart reflecting 2025 premiums based on income-tier:
Do note that for those who are age 63 and older, due to IRMAA’s (Income Related Monthly Adjustment Amount) 2-year look back provision, this is an important feature of the tax code to be discussed with your wealth advisor throughout the year so you can more confidently control what you pay for Medicare Part B & D premiums.
We look forward to serving as your dedicated wealth advisory team throughout this year. Know that if you have questions regarding how the above items may affect your financial plan, we are here and available to assist. We wish you all a wonderful start to your New Year!
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