Although inflation has ebbed, taxpayers will continue to enjoy inflation adjustments to their 2025 taxes — even though it’s the smallest increase in several years.
On October 22, 2024, the IRS announced its inflation-adjusted tax brackets for 2025, raising its standard deduction as well as its income thresholds for the 2025 tax year (for which returns will be filed in 2026).
The IRS adjusted tax brackets higher by about 2.8% for tax year 2025, which is the smallest adjustment in three years. That’s because inflationary pressures, as measured by the consumer price index, have fallen to their lowest levels since February 2021.
(In 2024, the IRS made an 5.4% increase in 2024 and a 7.1% boost in 2023.)
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By adjusting its tax brackets, the IRS hopes to combat the phenomenon known as “bracket creep,” which is what happens when inflation pushes your taxable income into a higher tax bracket — even though your real income (in terms of purchasing power) has not increased.
Here’s what you need to know for tax year 2025 (whose return you will file in 2026).
Has the standard deduction changed for tax year 2025?
The standard deduction has increased by about 2.8% in tax year 2025.
The standard deduction is the most common tax deduction used to reduce taxpayers' taxable income, which results in a lower tax bill for many Americans.
Related: What is the standard deduction for 2023 and 2024? Has it increased?
The standard deduction is dependent on your filing status — here’s a look at how much filers can expect to deduct:
Tax year 2024 standard deductions vs tax year 2025 standard deductions
| Filing Type | Tax Year 2024 | Tax Year 2025 | Change |
|---|---|---|---|
Single filers |
$14,600 |
$15,000 |
$400 or 2.8% |
Married filing jointly |
$29,200 |
$30,000 |
$800 or 2.8% |
Married filing separately |
$14,600 |
$15,000 |
$400 or 2.8% |
Heads of household |
$21,900 |
$22,500 |
$600 or 2.8% |
What is the additional standard deduction for tax year 2025?
Depending on your age, you may be eligible for an additional tax break. Taxpayers aged 65 and older are eligible for an additional standard deduction of $2,000 if they are single filers or heads of household, and $800 per qualifying individual whether married and filing jointly or separately.
In addition, individuals who fall within the IRS disability category of blindness are eligible for an additional standard deduction of $1,850 for single filers or heads of households, and $1,500 per qualifying individual as a married couple filing separately or jointly.
You can find out how much your standard deduction will be by using the IRS’ standard deduction calculator.
What are some other tax breaks for tax year 2025?
For qualifying taxpayers with three or more children, the Earned Income Tax Credit amount for tax year 2025 is $8,046. That's an increase of $216, or 2.8%, from tax year 2024, which topped out at $7,830.
Related: What is the Earned Income Tax Credit in 2023 and 2024? Who is eligible?
The Estate Tax credit also increased by 2.8%. The basic exclusion amount has increased for estates of decedents who died in 2025 to $13,990,000 (from $13,610,000 in 2024).
Tax brackets for tax year 2025 by filing status
There are seven federal tax brackets for tax year 2025, and the IRS has increased its income limits by about 2.8% for each bracket. Here’s the breakdown:
2025 tax brackets for single filers
| Taxable Income | Tax rate |
|---|---|
$0–$11,925 |
10% of the taxable income |
$11,926–$48,475 |
$1,192.50 + 12% of the amount over $11,925 |
$48,476–$103,350 |
$5,578.50 + 22% of the amount over $48,475 |
$103,351–$197,300 |
$17,651 + 24% of the amount over $103,350 |
$197,301–$250,525 |
$40,199 plus 32% of the amount over $197,300 |
$250,526–$626,350 |
$57,231 + 35% of the amount over $250,525 |
$626,351 and above |
$188,769.75 + 37% of the amount over $626,350 |
2025 tax brackets for married couples filing jointly
| Taxable Income | Tax rate |
|---|---|
$0–$23,850 |
10% of the taxable income |
$23,851–$96,950 |
$2,385 + 12% of the amount over $23,850 |
$96,951–$206,700 |
$11,157 + 22% of the amount over $96,950 |
$206,701–$394,600 |
$35,302 + 24% of the amount over $394,600 |
$394,601–$501,050 |
$80,398 plus 32% of the amount over $394,600 |
$501,051–$751,600 |
$114,462 + 35% of the amount over $501,050 |
$751,601 and above |
$202,154.50 + 37% of the amount over $751,600 |
2025 tax brackets for married couples filing separately
| Taxable Income | Tax rate |
|---|---|
$0–$11,925 |
10% of the taxable income |
$11,926–$48,475 |
$1,192.50 + 12% of the amount over $11,925 |
$48,476–$103,350 |
$5,578.50 + 22% of the amount over $48,475 |
$103,351–$197,300 |
$17,651 + 24% of the amount over $103,350 |
$197,301–$250,525 |
$40,199 plus 32% of the amount over $197,300 |
$250,526–$375,800 |
$57,231 + 35% of the amount over $250,525 |
$375,801 and above |
$101,077.25 + 37% of the amount over $375,800 |
2025 tax brackets for heads of household
| Taxable income | Tax rate |
|---|---|
$0–$17,000 |
10% of the taxable income |
$17,001–$64,850 |
$1,700 + 12% of the amount over $17,000 |
$64,851–$103,350 |
$7,442 + 22% of the amount over $64,850 |
$103,351–$197,300 |
$15,912 + 24% of the amount over $103,350 |
$197,301–$250,500 |
$38,460 plus 32% of the amount over $197,300 |
$250,501–$626,350 |
$55,484 + 35% of the amount over $250,500 |
$626,351 and above |
$187,031.50 + 37% of the amount over $626,350 |
Jacob Wackerhausen; Getty Images
Understanding tax brackets
The IRS divides income into ranges, or brackets, that are taxed at specific federal rates. As your income increases, so does your tax rate. For example, someone who makes $1 million a year pays more taxes than someone making $50,000 a year, and so on.
But under the U.S. tax system, not all income is taxed equally. Rather, it gets taxed at different rates based on the tax bracket you’re in. For instance, in the tax year 2025, a married couple filing jointly will pay 10% on their first $23,850, then 12% on additional income up to $96,950, 22% on any additional income up to $206,700, and so on.
More on taxes
- A full list of EVs and hybrids that qualify for federal tax credits
- How much do you have to make to file taxes?
- Are 529 college savings plans tax deductible? Everything you need to know
When are tax year 2025 taxes due?
Tax brackets for any year apply to the income you’ve made that year, so the period to file for tax year 2025 will open in early 2026 and close in April of that year, barring any extensions.
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Will Donald Trump’s tax cuts expire?
While he was president, Donald Trump signed into law the Tax Cuts and Jobs Act of 2017, self-described as “the biggest tax cut and reform in the history of our country.” This Act effectively overhauled the entire U.S. tax system in order to make filing easier for taxpayers. For example, it nearly doubled the standard deduction, which reduced the amount of time and paperwork the average taxpayer needed to do to file their taxes.
In the years since, the IRS reports that 87% of American taxpayers have claimed the standard deduction when filing their taxes.
The Act also lowered the corporate tax rate to 21% and eliminated the $4,050 personal exemption taxpayers previously could claim for themselves and each of their dependents.
But unless there’s Congressional action, this Act is set to expire in 2026. Trump has vowed to extend the tax cuts, while Vice President Kamala Harris promised not to raise taxes for individuals earning less than $400,000 per year.
Related: Veteran fund manager sees world of pain coming for stocks
