Another year’s almost behind us, and with that comes new tax updates that the IRS released for 2025’s tax brackets.
And while there were a few increases, the updates are largely in line with inflation and much smaller than last year’s.
Let’s go through the details and what to expect for next year!
What Does 2025’s Tax Brackets Look Like?
Here’s a quick overview of what you can expect for 2025’s tax brackets:
Single Filers
- 10% for incomes up to $11,925
- 12% for incomes between $11,926 and $48,475
- 22% for incomes between $48,476 and $103,350
- 24% for incomes between $103,351 and $197,300
- 32% for incomes between $197,301 and $250,525
- 35% for incomes between $250,526 and $626,350
- 37% for incomes above $626,350
Head Of Household
- 10% for incomes up to $17,000
- 12% for incomes between $17,001 and $64,850
- 22% for incomes between $64,851 and $103,350
- 24% for incomes between $103,351 and $197,300
- 32% for incomes between $197,301 and $250,525
- 35% for incomes between $250,526 and $626,350
- 37% for incomes above $626,350
Married Couples Filing Jointly
- 10% for incomes up to $23,850
- 12% for incomes between $23,851 and $96,950
- 22% for incomes between $96,951 and $206,700
- 24% for incomes between $206,701 and $394,600
- 32% for incomes between $394,601 and $501,050
- 35% for incomes between $501,051 and $751,600
- 37% for incomes above $751,600
Married Couples Filing Separately
- 10% for incomes up to $11,925
- 12% for incomes between $11,926 and $48,475
- 22% for incomes between $48,476 and $103,350
- 24% for incomes between $103,351 and $197,300
- 32% for incomes between $197,301 and $250,525
- 35% for incomes between $250,526 and $375,800
- 37% for incomes above $375,800
What Other Benefits Can You Expect?
New Capital Gains Thresholds
Along with income taxes, capital gains tax thresholds are set to increase slightly. The new ones for 2025 are:
Single Filers
- 0% for incomes up to $48,350
- 15% for incomes between $48,351 and $533,400
- 20% for incomes above $533,401
Married Filing Jointly
- 0% for incomes above $96,000
- 15% for incomes between $96,701 and $600,050
- 37% for incomes above $600,051
Higher Standard Deductions
Standard deductions are going up once again in 2025. If you’re a married couple filing jointly, the amount goes up by $800 to $30,000. For single filers and couples filing separately, the total amount increases to $22,500.
Higher Estate Tax And Gift Thresholds
Anyone getting an inheritance or a large gift from a loved one still must pay tax. For 2025, you can receive up to $13.99 million without paying estate tax. As for gifts, you’re eligible for up to $19,000 tax-free to keep up with inflation.
Higher Earned Income Tax Credit
The Earned Income Tax Credit (EITC) helps low and moderate-income households get some extra tax relief. For 2025, you can expect a 2.7% increase to $649 for single filers and $7,830 if you have three or more children.
Other Tax Incentives To Be Aware Of In 2025
Aside from these increases, you can expect other tax incentives to keep up with inflation, including:
- Medical savings accounts
- Adoption credits
- Foreign Earned Income Exclusion
- Quality transportation fringe benefits
- Alternative minimum tax exemption amounts
Check with a tax preparer or accountant to see if you’re eligible for any of these benefits and potentially save thousands come this tax season!
The Bottom Line
2025’s tax changes largely keep in line with inflation. Still, any slight boost could give you some financial relief, especially during these tough economic times.
The last day to file is April 15th, 2025, so don’t forget to file your taxes early to avoid any penalties!
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