The IRS has announced the updated federal income tax brackets and standard deductions for the 2025 tax year, which will impact the taxes filed in 2026. These changes include higher income thresholds for each tax bracket, ensuring that taxpayers can potentially retain more of their income in lower brackets due to inflation adjustments. Understanding these new brackets is essential for tax planning and optimizing your personal finances.

Federal Income Tax Brackets for 2025

Federal income tax brackets define the tax rates applicable to different portions of your "taxable income." Taxable income is calculated by subtracting either the standard deduction or itemized deductions from your adjusted gross income. Below are the updated marginal tax brackets for the 2025 tax year:

Taxable Income Marginal Tax Rate
$23,850 or less 10%
$23,851 to $96,950 $2,385 plus 12% of the amount over $23,850
$96,951 to $206,700 $11,157 plus 22% of the amount over $96,950
$206,701 to $394,600 $35,302 plus 24% of the amount over $206,700
$394,601 to $501,050 $80,398 plus 32% of the amount over $394,600
$501,051 to $751,600 $114,462 plus 35% of the amount over $501,050
$751,601 and above $202,154.50 plus 37% of the amount over $751,600

2025 Standard Deduction Increases

In addition to the new tax brackets, the standard deduction is set to rise in 2025:

  • Married couples filing jointly: $30,000 (up from $29,200 in 2024)
  • Single filers: $15,000 (up from $14,600 in 2024)

These changes reflect inflation adjustments, which help minimize the tax burden for many taxpayers. The higher standard deductions introduced under the Tax Cuts and Jobs Act (TCJA) of 2017 are set to expire after 2025 unless Congress extends them. Therefore, it’s crucial to take advantage of the increased standard deductions in the coming tax year.

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How These Changes Impact Your Taxes

The updated federal income tax brackets and higher standard deductions may reduce your taxable income, particularly for middle- and high-income earners. To benefit from these adjustments, ensure you are aware of how the new tax rates and deductions apply to your financial situation.

Whether you're a single filer or a married couple, planning ahead can help you optimize deductions, reduce taxable income, and ensure you're prepared for any potential tax obligations in 2025.

In summary, staying informed about these federal tax updates is critical for effective tax planning. Be sure to review your financial status and consider consulting a tax professional for additional guidance in navigating the changes for the 2025 tax year.

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