IRS Announces 2025 Income Tax Brackets, Updated Standard Deduction
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December 12, 2024Here’s a rundown of changes to some well-known tax provisions for the 2025 tax year.
Takeaways
- On Oct. 22, 2024, the IRS announced the annual inflation adjustments for 2025.
- A handful of tax provisions, including the standard deduction and tax brackets, will see new limits and thresholds.
- These changes will apply to income earned in 2025, which is reported on tax returns filed in 2026.
Each year, the IRS updates common tax provisions, such as income tax brackets and the standard deduction, to ensure the tax code is keeping pace with the rising cost of living.
These tweaks — formally known as inflation adjustments — help prevent “bracket creep,” where taxpayers who received a cost-of-living raise can pay more in taxes even though their purchasing power remains unchanged.
In recent years, high inflation has led to bigger annual adjustments — 7.1% in 2023 and 5.4% in 2024. However, as inflation cools, 2025’s adjustments are smaller, at 2.8%.
Even though next year’s changes are modest, they could still mean lower tax bills for some when they file in 2026. Here’s a look at how certain tax thresholds and credits will shift for the 2025 tax year, plus a comparison to 2024.
Federal tax brackets and tax rates
In the U.S., there are seven marginal rates — 10%, 12%, 22%, 24%, 32%, 35% and 37% — which will remain unchanged for 2025.
Contrary to a popular myth, it’s uncommon for people to pay a single flat federal tax rate on their taxable income. Instead, portions of a person’s income can be taxed at different rates depending on which tax brackets they fall into. For example, some of a person’s income could be taxed at 10%, another chunk at 12% and so on.
For 2025, the IRS is adjusting those tax brackets — the windows of income that dictate where a tax rate ends and begins — for each filing status. The adjustments mean that some people may be able to keep some of their income in lower tax brackets, and those who received a cost-of-living raise may avoid getting a portion of their income pushed into a higher bracket.
Married filers, for example, can make up to $96,950 to remain with a top tax rate of 12%, compared with $94,300 in 2024. This increase could allow some couples to shelter an additional $2,650 from a higher tax rate in 2025.
Click below to see how the brackets will shift for each filing status.
2024 vs. 2025 tax brackets: Married filing jointly
| Tax rate | 2024 | 2025 |
|---|---|---|
| 10% | $0 to $23,200 | $0 to $23,850 |
| 12% | $23,201 to $94,300 | $23,851 to $96,950 |
| 22% | $94,301 to $201,050 | $96,951 to $206,700 |
| 24% | $201,051 to $383,900 | $206,701 to $394,600 |
| 32% | $383,901 to $487,450 | $394,601 to $501,050 |
| 35% | $487,451 to $731,200 | $501,051 to $751,600 |
| 37% | $731,201 or more | $751,601 or more |
2024 vs. 2025 tax brackets: Single filers
| Tax rate | 2024 | 2025 |
|---|---|---|
| 10% | $0 to $11,600 | $0 to $11,925 |
| 12% | $11,601 to $47,150 | $11,926 to $48,475 |
| 22% | $47,151 to $100,525 | $48,476 to $103,350 |
| 24% | $100,526 to $191,950 | $103,351 to $197,300 |
| 32% | $191,951 to $243,725 | $197,301 to $250,525 |
| 35% | $243,726 to $609,350 | $250,526 to $626,350 |
| 37% | $609,351 or more | $626,351 or more |
2024 vs. 2025 tax brackets: Heads of household
| Tax rate | 2024 | 2025 |
|---|---|---|
| 10% | $0 to $16,550 | $0 to $17,000 |
| 12% | $16,551 to $63,100 | $17,001 to $64,850 |
| 22% | $63,101 to $100,500 | $64,851 to $103,350 |
| 24% | $100,501 to $191,950 | $103,351 to $197,300 |
| 32% | $191,951 to $243,700 | $197,301 to $250,500 |
| 35% | $243,701 to $609,350 | $250,501 to $626,350 |
| 37% | $609,351 or more | $626,351 or more |
Standard deduction
The IRS lets most filers lower their taxable income by taking the standard deduction or itemizing their returns.
The standard deduction, a flat amount based on filing status and age, is popular, as it requires less work to claim and is often more beneficial for those who might not have deductible expenses.
For 2025, the standard deduction will be $15,000 for single filers and those married filing separately, a $500 increase from 2024. Joint filers will be eligible to take $30,000 and heads of household can take $22,500, a $800 and $600 increase over 2024, respectively.
| Filing status | 2024 standard deduction | 2025 standard deduction |
|---|---|---|
| Single; Married filing separately | $14,600. | $15,000. |
| Married filing jointly; Surviving spouse | $29,200. | $30,000. |
| Head of household | $21,900. | $22,500. |
| Source: Internal Revenue Service | ||
» Need help deciding whether to itemize or take the standard deduction? Learn about the differences.
What else will change for taxes in 2025?
Also included in the IRS’ 27-page inflation release are various changes to several tax provisions beyond the federal tax brackets.
HSAs and FSAs
Starting in 2025, taxpayers who contribute to a health flexible spending account (FSA) can contribute up to $3,300 and, if their plan permits, carry over up to $660 into the next tax year.
For those with health savings accounts, the 2025 limit for contributions will rise to $4,300 for self coverage and $8,550 for family coverage.
Gift tax exclusion
The annual exclusion for gifts, which limits how much taxpayers can give an individual without filing a gift tax return on certain gifts, will increase to $19,000 per person in 2025, up $1,000 from 2024.
Estate tax exclusion
The lifetime estate tax exclusion establishes a threshold for the taxation of estates upon a wealthy person’s death. In 2025, estates valued at or below $13.9 million will not be subject to estate tax, up from $13.6 million in 2024.
Earned Income tax credit
The earned income tax credit, a refundable tax credit for low- and moderate-income workers, will also see a bump in 2025. The total credit amount depends on income and the number of children — but people without kids can still qualify. For 2024, the earned income credit ranges from $632 to a maximum of $7,830. In 2025, the credit will increase to a maximum of $8,046 for qualifying taxpayers with three or more children.
