The Internal Revenue Service (IRS) has released the inflation-adjusted federal income tax brackets and standard deductions for the 2025 tax year, applicable to returns filed in 2026.
2025 Federal Income Tax Brackets
The tax rates remain unchanged; however, the income thresholds have been adjusted for inflation by approximately 2.8%.
- 10%:
Single filers: Income up to $11,925
Married filing jointly: Income up to $23,850 - 12%:
Single filers: Income over $11,925
Married filing jointly: Income over $23,850 - 22%:
Single filers: Income over $48,475
Married filing jointly: Income over $96,950 - 24%:
Single filers: Income over $103,350
Married filing jointly: Income over $206,700 - 32%:
Single filers: Income over $197,300
Married filing jointly: Income over $394,600 - 35%:
Single filers: Income over $250,525
Married filing jointly: Income over $501,050 - 37%:
Single filers: Income over $626,350
Married filing jointly: Income over $751,600
Standard Deduction Increases
The standard deduction amounts have been increased as follows:
- Single filers: $15,000 (up from $14,600 in 2024)
- Married filing jointly: $30,000 (up from $29,200 in 2024)
- Heads of household: $22,500 (up from $21,900 in 2024)
Additional Adjustments
- Alternative Minimum Tax (AMT) Exemption:
Single filers: Exemption amount increases to $88,100, with the phase-out beginning at $626,350.
Married filing jointly: Exemption amount increases to $137,000, with the phase-out starting at $1,252,700. - Earned Income Tax Credit (EITC):
For taxpayers with three or more qualifying children, the maximum EITC amount rises to $8,046, up from $7,830 in 2024. - Estate and Gift Tax Exemptions:
The estate tax exclusion amount increases to $13,990,000, up from $13,610,000 in 2024.
The annual exclusion for gifts rises to $19,000, up from $18,000 in 2024.
Future Considerations
It’s important to note that the current tax rates and standard deductions are part of the Tax Cuts and Jobs Act of 2017, which is set to expire after 2025. Without legislative action, tax rates will revert to their previous levels, with the top rate increasing to 39.6%.
These adjustments aim to prevent “bracket creep,” where taxpayers are pushed into higher tax brackets due to inflation without an actual increase in real income.
For more detailed information, refer to the official IRS announcement.
What These Changes Mean for You
The IRS’s 2025 income tax bracket adjustments and standard deduction increases are designed to account for inflation and prevent taxpayers from being unintentionally pushed into higher brackets. While the tax rates themselves remain unchanged, these threshold shifts may still affect your filing strategy, refund expectations, and overall tax liability—especially when paired with changes to the AMT exemption, Earned Income Tax Credit, and estate and gift tax exclusions.
Whether you’re preparing to file or reassessing your long-term tax strategy, now is a good time to take stock of any ongoing tax concerns. Issues like unfiled tax returns, underreported income, or IRS notices can complicate your position—even when income thresholds change.
Delia Law assists individuals and businesses with a wide range of tax planning and tax resolution services, and we stay informed on every update that could impact your return. We encourage you to learn more about who we are and then contact us to schedule a free consultation.
