Check If Your Tax Bracket Will Change in 2025
The IRS has released its inflation adjustments for tax year 2025 , applicable to returns filed in 2026, which affect both your tax bracket and the standard deduction, among other updates.
Tax rates will remain unchanged in 2025, but the thresholds for each bracket are raised to account for inflation and “scale creep,” which pushes filers into higher tax brackets (or reduces the value of deductions and credits) without actually increasing income. . However, tax rates could increase in 2026 unless the now-expiring Tax Cuts and Jobs Act of 2017 is extended.
The adjustments for 2025 are the smallest in recent years at less than 3%.
Income tax limits in 2025
Here are the changes for single files:
-
37% for income over $626,350 (up from $609,350)
-
35% for income over $250,525 (down from $243,725)
-
32% for income over $197,300 (up from $191,950)
-
24% for income over $103,350 (up from $100,525)
-
22% for income over $48,475 (down from $47,151)
-
12% for income over $11,925 (up from $11,600)
-
10% for earnings of $11,925 or less
The updated thresholds for joint filing of marriage documents are:
-
37% for income over $751,600 (down from $731,200)
-
35% for income over $501,050 (up from $485,450)
-
32% for income over $394,600 (up from $383,900)
-
24% for income over $206,700 (up from $201,050)
-
22% for income over $96,950 (down from $94,300)
-
12% for income over $23,850 (instead of $23,200)
-
10% for income $23,850 or less
Remember that these tax rates are marginal, not flat, so you don’t pay the same rate on all your income. If you file alone, the first $11,925 you earn is taxed at 10% (or up to $1,192), the amount between $11,926 and $48,475 is taxed at 12%, and so on.
Standard increase in deduction
The IRS also announced an increase in the standard deduction in 2025 to $15,000 for single filers (from $14,600) and to $30,000 for married couples filing jointly (from $29,200). The standard deduction , taken by about 90% of taxpayers, reduces your taxable income, possibly reducing what you owe or increasing your refund. Itemizing on your return may make sense if your deductions exceed these thresholds.
Other tax changes for 2025
There are several more tax updates next year that will impact some filers.
For example: The capital gains tax thresholds due on the sale of assets that have appreciated in value will increase: Single filers earning up to $48,350 and married couples earning up to $96,700 will pay 0% on the gain. Single filers will pay 15% if they earn between $48,350 and $533,400 ($96,700 to $600,050 for married couples) and 20% if their income exceeds $533,400 ($600,050 for married couples). steam). The estate tax exclusion will increase from $13.61 million to $13.99 million, and gifts of up to $19,000 are tax-free (up from $18,000 in 2024).
The Earned Income Tax Credit for low- and moderate-income filers increases from $632 to $649 for single filers, and the maximum for qualifying households with three or more children increases from $7,830 to $8,046.