For 2025, the IRS has updated federal income tax brackets to keep up with inflation, raising the income thresholds by approximately 2.8% across all brackets. These new brackets will apply to income earned in 2025 and affect tax returns filed in 2026. Here’s a quick breakdown of the 2025 brackets:
- 10%: Taxable income up to $11,925 for single filers and $23,850 for joint filers.
- 12%: Over $11,925 to $48,475 for single filers and $23,850 to $96,950 for joint filers.
- 22%: Over $48,475 to $103,350 for single filers and $96,950 to $206,700 for joint filers.
- 24%: Over $103,350 to $197,300 for single filers and $206,700 to $394,600 for joint filers.
- 32%: Over $197,300 to $250,525 for single filers and $394,600 to $501,050 for joint filers.
- 35%: Over $250,525 to $626,350 for single filers and $501,050 to $751,600 for joint filers.
- 37%: Above $626,350 for single filers and $751,600 for joint filers.
Additionally, the standard deduction will increase to $15,000 for single filers and $30,000 for married couples filing jointly, providing some tax relief by reducing the amount of income subject to taxation. These adjustments help mitigate “bracket creep,” which can push taxpayers into higher brackets due to inflation, even if their real purchasing power has not increased significantly
This modest adjustment follows a larger increase of about 5.4% in 2024, reflecting a cooling trend in inflation rates over the past year.