Jamie Spencer
With 2025 just around the corner, the IRS has introduced updated federal income tax brackets and standard deductions, setting the stage for potential changes in how Americans file their taxes. The changes, which will impact tax returns filed in 2026, reflect adjustments in income thresholds and other key provisions. As tax policies continue to evolve, taxpayers will need to stay informed to maximize their deductions and understand how these shifts might affect them in the coming years.
Key Changes to Tax Brackets and Rates
For 2025, the IRS has raised the income thresholds across all tax brackets, meaning taxpayers will see slight adjustments in what portion of their income is taxed at different rates. For individuals, the top tax rate of 37% will now apply to those with taxable incomes exceeding $626,350. For married couples filing jointly, the threshold for the top rate will be $751,600.
These adjustments mean that even if your income remains the same, a slightly larger portion may be taxed at a lower rate due to the expanded brackets. This is part of the IRS’s ongoing efforts to keep tax policy aligned with inflation and economic realities.
Breakdown of the 2025 Tax Brackets for Single and Married Filers
For single filers, the income brackets are as follows:
- 10% rate: Up to $11,925
- 12% rate: $11,926 to $48,475
- 22% rate: $48,476 to $103,350
- 24% rate: $103,351 to $197,300
- 32% rate: $197,301 to $250,525
- 35% rate: $250,526 to $626,350
- 37% rate: Over $626,350
For married couples filing jointly:
- 10% rate: Up to $23,850
- 12% rate: $23,851 to $96,950
- 22% rate: $96,951 to $206,700
- 24% rate: $206,701 to $394,600
- 32% rate: $394,601 to $501,050
- 35% rate: $501,051 to $751,600
- 37% rate: Over $751,600
These updated brackets are critical for taxpayers to understand how their income will be taxed, as they affect how much individuals and families will owe in federal income taxes. The good news is that the higher thresholds may offer slight relief, as more income will fall into lower tax rates compared to previous years.
Increased Standard Deduction Offers More Relief
Another significant change for 2025 is the increase in the standard deduction. Married couples filing jointly can now claim a deduction of $30,000, up from $29,200 in 2024. Single filers will see their deduction rise to $15,000 from $14,600. These increases will allow taxpayers to shield more of their income from taxes, potentially lowering their overall tax burden.
The higher standard deduction is part of the tax cuts passed during the Trump administration, but these benefits may not last beyond 2025 unless Congress intervenes. If the provisions expire, taxpayers could see a return to pre-2017 levels for both tax rates and deductions, which would likely result in higher taxes for many Americans.
The Sunset of Trump’s Tax Cuts: What’s Next?
One of the most significant looming questions is the fate of the lower tax rates and higher deductions that were enacted under former President Donald Trump. If Congress does not act by the end of 2025, these provisions will automatically expire, returning tax brackets to the rates seen in 2017. This means taxpayers could face higher taxes starting in 2026, with rates reverting to 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.
This potential shift has sparked debate over whether lawmakers will extend these cuts or allow them to expire. For now, taxpayers should be aware that while 2025 brings some tax relief, it could be temporary, depending on future political and economic developments.
As the IRS introduces new tax brackets and higher deductions for 2025, taxpayers will need to stay vigilant about how these changes affect their financial planning. While the adjustments offer some relief for the coming tax year, the uncertainty around the future of tax policy, especially with the potential expiration of Trump’s tax cuts, means that planning for the long term remains crucial. For now, the expanded tax brackets and increased deductions provide opportunities for taxpayers to optimize their filings, but 2026 could bring significant changes.
