2024 Standard Deduction: The IRS has announced the inflation-adjusted tax brackets for 2025, which will see income limits rise by 2.8% from 2024—the smallest adjustment in recent years. These yearly updates help prevent “bracket creep,” where inflation pushes people into higher tax brackets even if their real purchasing power hasn’t increased. Adjustments reached a peak of 7% in 2023 but have since slowed to 5.4%, reflecting lower inflation as it drops to a three-year low.
For example, married couples filing jointly will now enter the 10% tax bracket at an income of $23,850 in 2025, up slightly from $23,200 in 2024. This gradual increase helps limit the impact of inflation on tax obligations, offering modest relief for taxpayers in the lower brackets.
IRS 2025 Tax Brackets: What to Expect and How Much You Have to Pay?
Standard Deductible has been updated for 2025
In 2025, the standard deduction for married couples filing jointly will go up to $30,000. This is a 2.7% increase from the present amount of $29,200. People who are single or married but file their taxes separately will be able to deduct $15,000 instead of $14,600 this year.
The Tax Policy Center says that most people use the standard deduction, which cuts their taxable income. With the standard deduction for 2025, a married couple making $100,000 a year may be able to lower their taxed income to $70,000. You could also list your expenses, but most people don’t think their deductions are enough to meet the requirement.
2024 Standard Deduction: How the Different Tax Rates Work
Because U.S. taxes are progressive, tax rates go up as wealth does. Some people think, wrongly, that their top rate is all they make. Not really. Tax rates show the amount of tax that each level of income has to pay.
For example, married couples filing jointly who make more than $23,850 would have to pay $2,385 in federal income tax. The tax rate would be 10% on the first $23,850 and 12% on all wages over that amount, up to $96,950. In real life, couples in these groups may owe less or get rebates because of the standard deduction and other benefits.
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Changes to the limits on capital gains for 2025
Some low- and middle-income taxpayers benefit from a 0% tax rate on sales of assets that have gone up in value. To keep up with inflation, the IRS now changes the income amounts for capital gains tax. People who are married and make up to $96,700 a year or up to $48,350 a year will be able to get this rate in 2025.
Those making more than $48,350 will pay 20%, and those making between $48,350 and $533,400 as a single person will pay 15%. Those making between $96,700 and $600,050 will pay 15%, while those making more will pay 20%.
Estate tax and gifts that aren’t taxed
From $13.61 million in 2024 to $13.99 million the next year, the federal estate tax escape will go up. From the $18,000 that people can give this year, they will be able to give up to $19,000 tax-free in 2025.
How much tax do single people have to pay next year?
- 10%: $0 – $11,925
- 12%: $11,926 – $48,47
- 22%: $48,476 – $103,350
- 24%: $103,351 – $197,300
- 32%: $197,301 – $250,525
- 35%: $250,526 – $626,350
- 37%: $626,351 and up
How much married couples will pay in taxes next year?
- 10%: $0 – $23,850
- 12%: $23,841 – $95,950
- 22%: $96,951 – $206,700
- 24%: $206,701 – $394,600
- 32%: $394,601 – $501,050
- 35%: $501,051 – 751,600
- 37%: $751,601 and up
