With January approaching, Americans are gearing up for the 2025 tax filing season.
The Internal Revenue Service (IRS) has announced significant changes to tax brackets, standard deductions, and credits for 2024 and 2025 to account for inflation, which could impact taxpayers’ finances.
In 2025, the IRS will continue adjusting tax brackets, increasing the standard deduction, and slightly raising income thresholds for single and married filers.
For 2025, the standard deduction will rise by $400 to $15,000 for single filers and married individuals filing separately. Married couples filing jointly will see an $800 increase to $30,000. For heads of households, the deduction will rise by $600 to $22,500.
Tax brackets have also been adjusted to ensure taxpayers pay the same proportion of their income despite inflation. Unless you receive at least a 2.8 percent raise in 2025, your income will not fall into a higher tax bracket.
Tax brackets for 2025
Below are the most recent adjustments for tax year 2025, which will apply to tax returns filed starting tax season 2026.
- 37 percent—Single income over $626,350; married couples filing jointly over $751,600.
- 35 percent—Single income over $250,525; married couples filing jointly over $501,050.
- 32 percent—Single income over $197,300; married couples filing jointly over $394,600.
- 24 percent—Single income over $103,350; married couples filing jointly over $206,700.
- 22 percent—Single income over $48,475; married couples filing jointly over $96,950.
- 12 percent—Single income over $11,925 and married couples filing jointly with income over $23,850
- 10 percent—Single income of $11,925 or less and married couples filing jointly with income less than $23,850
Tax Exemptions and Credits Change
To account for inflation, the IRS has also increased thresholds for the Alternative Minimum Tax (AMT) and Earned Income Tax Credit (EITC) for 2025.
- The AMT exemption will rise to $88,100 for unmarried filers (up from $85,700) and to $137,000 for married filers (up by $3,700).
- The EITC will increase by $216.20.
These exemptions begin to phase out at higher income levels.
- Single filers – Phase-out starts at $626,350
- Married filing jointly – Phase-out starts at $1,252,700
Tax Brackets for 2024
For comparison below are brackets for tax year 2024 and apply to income tax returns filed in 2025.
- 37 percent—Single income over $609,350 and married couples filing jointly over $731,200.
- 35 percent—Single income over $243,725 and married couples filing jointly over $487,450.
- 32 percent—Single income over $191,950 and married couples filing jointly over $383,900.
- 24 percent—Single income over $100,525 and married couples filing jointly over $201,050.
- 22 percent—Single income over $47,150 and married couples filing jointly over $94,300.
- 12 percent—Single income over $11,600 and married couples filing jointly over $23,200.
- 10 percent—Single income of $11,600 or less and married couples filing jointly less than $23,200
2024 Health Savings Account (HSA) Contribution Limits
For 2024, the IRS has raised the contribution limit for employee health savings accounts to $3,200.
- Individuals with self-only coverage in a medical savings account now face a maximum out-of-pocket expense limit of $5,550, an increase of $250 from 2023.
- For family coverage, the out-of-pocket expense limit has risen to $10,200, up $550 from the previous year.