Tax Brackets in 2025: What You Need to Know

Rick Ruberg
Jan 9
3 min read

Updated: Oct 20

The IRS has announced some inflation adjustments for the 2025 tax year that will affect nearly every taxpayer. These tax bracket changes reflect the IRS's annual adjustments to account for inflation, ensuring that taxpayers don't face "bracket creep" when their income increases merely keep pace with inflation.

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Standard Deduction Increases Provide Relief

For 2025, taxpayers will see a notable increase in the standard deduction amounts. Following the enactment of the One Big Beautiful Bill in July 2025, married couples filing jointly will now enjoy a standard deduction of $31,500 for tax year 2025, an increase of $2,300 from 2024. Single taxpayers and married individuals filing separately will see their standard deduction rise to $15,750 for 2025, up $1,150 from the previous year. Heads of household will have a standard deduction of $23,625, an increase of $1,025 from 2024.

Federal Income Tax Brackets for 2025

The tax brackets themselves have also shifted upward for 2025. Here's how the new brackets break down for different filing statuses:

Single filers tax brackets for tax year 2025

Taxable Income	Tax Rate
$11,925 or less	10%
$11,926 to $48,475	12% for incomes over $11,925
$48,476 to $103,350	22% for incomes over $48,475
$103,351 to $197,300	24% for incomes over $103,350
$197,301 to $250,525	32% for incomes over $197,300
$250,526 to $626,350	35% for incomes over $250,525
$626,351 and above	37% for incomes over $626,350

Source: IRS

Married filing jointly tax brackets for tax year 2025

Taxable Income	Tax Rate
$23,850 or less	10%
$23,851 to $96,950	12% for incomes over $23,850
$96,951 to $206,700	22% for incomes over $96,950
$206,701 to $394,600	24% for incomes over $206,700
$394,601 to $501,050	32% for incomes over $394,600
$501,051 to $751,600	35% for incomes over $501,050
$751,601 and above	37% for incomes over $751,600

Source: IRS

This progressive system of tax brackets ensures that increases in income don't result in disproportionate tax jumps at bracket boundaries.

Additional Inflation Adjustments for 2025

Beyond tax brackets and standard deductions, several other important tax provisions have been adjusted for inflation:

The Alternative Minimum Tax (AMT) exemption amount has increased to $88,100 for single filers and $137,000 for married couples filing jointly.

The maximum Earned Income Tax Credit has risen in 2025 to $8,046 for qualifying taxpayers with three or more qualifying children.

The Federal Estate-Tax Exclusion has increased to $13.99 million, from $13.61 million in '24.

Tax Planning Opportunities for 2025

These inflation adjustments create several planning opportunities for taxpayers:

Consider timing income and deductions between tax years. If you expect to be in a lower tax bracket in 2025, you might benefit from deferring income into 2025 or accelerating deductions into 2024.

Review your withholding and estimated tax payments. The bracket changes might affect how much you should have withheld from your paycheck or pay in estimated taxes.

Evaluate charitable giving strategies. The higher standard deduction might influence whether you should bundle charitable contributions into alternate years to exceed the standard deduction threshold.

What's ahead for Tax Brackets in 2025

While these changes open up some exciting planning opportunities, it’s worth mentioning that the tax landscape has settled into a more stable state. The Tax Cuts and Jobs Act (TCJA), which was initially set to wrap up at the end of 2025, has now been made permanent thanks to the One Big Beautiful Bill that was passed in July 2025.

This means that the current tax bracket structure, along with the higher standard deductions and other provisions from the TCJA, will stick around beyond 2025, giving you more certainty for your long-term tax planning.

Teaming up with a qualified tax professional can really help you make sense of these changes and craft strategies to optimize your tax situation for 2025 and beyond. They can guide you through how these adjustments impact your unique circumstances and help you spot opportunities to reduce your tax burden while staying compliant with all the tax laws and regulations.