The Internal Revenue Service (IRS) of the United States announced on Tuesday, October 22, the federal income tax brackets and standard deduction amounts for the 2025 tax year, once again raising the income thresholds for each tax bracket.
The income tax brackets and standard deduction amounts released by the IRS on Tuesday apply to the 2025 tax year, with corresponding tax filings to be done in 2026. According to the agency’s announcement, the new tax regulations provide detailed information involving adjustments and changes to over 60 tax provisions.
Annually in the fall, the IRS adjusts tax brackets and dozens of other regulations for the upcoming tax year to offset the impact of inflation. This helps prevent what is known as “bracket creep,” where taxpayers are pushed into higher tax brackets due to cost of living adjustments (COLA) or raises, but their actual standard of living has not improved due to inflation. However, if the tax thresholds are higher, some taxpayers may fall into lower tax brackets, thereby reducing their tax burden.
Nevertheless, with the US inflation rate at its lowest level in three years, the annual adjustments to tax brackets by the IRS are becoming smaller.
Federal income tax brackets show the amount of tax owed on each portion of your income. After subtracting the standard deduction from your income, the remaining income will be taxed according to the annual tax rates published by the IRS.
For the 2025 tax year, the federal standard deduction will increase. For single taxpayers and married individuals filing separately, the standard deduction for next year will rise to $15,000, an increase of $400 from 2024; for married couples filing jointly, the standard deduction will increase to $30,000, up by $800 compared to the 2024 tax year; for individuals filing as heads of household, the standard deduction for the 2025 tax year will be $22,500, a $600 increase from 2024.
In the 2025 tax year, the US federal income tax law still stipulates seven tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Each tax rate applies to a certain range of taxable income, known as tax brackets.
For the 2025 tax year, these seven tax rates will apply to the following new income tax brackets:
– 10%: Income up to $11,925 ($23,850 for married couples filing jointly)
– 12%: Income over $11,925 ($23,850 for married couples filing jointly)
– 22%: Income over $48,475 ($96,950 for married couples filing jointly)
– 24%: Income over $103,350 ($206,700 for married couples filing jointly)
– 32%: Income over $197,300 ($394,600 for married couples filing jointly)
– 35%: Income over $250,525 ($501,050 for married couples filing jointly)
– 37%: Income over $626,350 ($751,600 for married couples filing jointly).