The Internal Revenue Service (IRS) announced changes to taxes for 2025, such as new tax brackets, amounts for the Earned Income Tax Credit (EITC), and standard deductions. This means that it should be easy to get caught up on time.
The announced rules are for the 2025 tax year, so the results will show up on tax returns for 2026. The next tax season, from January to April 2025, is for the 2024 tax year, and those rules have been in place for a year.
The most important change for the 2025 tax year is that the tax brackets will be changed. These changes are made to account for inflation and keep taxpayers from having to pay more tax when their wages rise to keep up with inflation but not by a large amount.
What are the new IRS tax brackets for 2025? Â
The overall system will stay the same. There will still be seven tax brackets, and the top bracket will still be 37%.
To account for inflation, the remaining tax brackets have been changed by 2.8%. This helps some taxpayers because it means they can pay less tax on more of their income. Here are the new tax rates and ranges:
- Tax / Rate, Individual Income Range, Income Range for Joint Filers Â
- Tax / Rate: 10% | Individual income bracket: Up to $11,925 | Income bracket for joint filers: Up to $23,850Â Â
- Tax / Rate: 12% | Individual income range: $11,926 – $48,475 | Joint filer income range: $23,851 – $96,950 Â
- Tax / Rate: 22% | Individual income range: $48,476 – $103,350 | Income range for joint filers: $96,951 – $206,700 Â
- Tax / Rate: 24% | Range of individual income: $103,351 – $197,300 | Range of income for joint filers: $206,701 – $394,600 Â
- Tax / Rate: 32% | Individual income range: $197,301 – $250,525 | Joint filer income range: $394,601 – $501,050 Â
- Tax / Rate: 35% | Range of individual income: $250,526 – $626,350 | Range of income for joint filers: $501,051 – $751,600 Â
- Tax / Rate: 37% | Individual Income Range: More than $626,351 | Income Range for joint filers: Over $751,601Â
- As we have explained, the 37% tax rate is the only one that remains unchanged as of 2024. Â
Increase in the standard deduction for the year 2025Â
An increase in the standard deduction is another change that has been made. There are two types of deductions: itemized deductions and standard deductions. Both lower the amount of taxable income that people have to pay.
Itemized deductions do not change because they are filed separately and for a set amount of money that changes each year.
The standard deduction, on the other hand, is the same for everyone and should keep up with inflation since it is meant to make filing easier. These are what the new standard deductions are:
- Single filers: will see a $400 increase to $15,000. Â
- Joint filers: will see an increase of $800, reaching $30,000. Â
- Heads of Household: will see an increase of $600, reaching $22,500. Â
- Changes to the Earned Income Tax Credit (EITC)Â Â
People and families with low to moderate incomes can get tax breaks through the EITC. Even though families with kids are more likely to get it, you do not have to have kids to get it. Here are the new amounts:
- Eligible taxpayers with no children: maximum credit of $649. Â
- Eligible taxpayers with one child: maximum credit of $4,328. Â
- Eligible taxpayers with two children: maximum credit of $7,152. Â
- Eligible taxpayers with three or more children: maximum credit of $8,046.Â
