As the New Year approaches, citizens of America are getting ready for taxes under inflation strains. Each year, the annual automatic adjustments that the IRS implements for inflation apply to more than 60 tax provisions. This year’s changes to deductions, tax rates, and credits will affect taxpayers from coast to coast in 2024. Below, we present some of the most significant adjustments impacting your tax filing in 2025.
Standard deductions: What you need to know
The IRS has also provided information on tax changes to take place in 2025. They include an increase in the standard deduction for all filing statuses. The standard deduction for single taxpayers and married taxpayers will increase to $15,000, a $400 increase from 2024. Married couples filing jointly will see their standard deduction rise by $800 up to $30,000. Heads of households stand to get a $600 up to $22,500 deduction on their standard deduction.
Current tax brackets applicable for the 2025 filing season will also change, whereby the single taxpayer earning above $626,350 and married taxpayers earning over $751,600 will fall under a 37% tax bracket. The adjustments are meant to address inflation so that when income rises because of inflation rather than real income growth, taxpayers are not paying higher taxes.
Overall, these changes in tax brackets, standard deductions, and credits are a show of the IRS’s concern to allow taxpayers to move along with inflation. Now as we are almost heading to the tax season, it becomes important to review the financial situation and benefit from maximum savings through these adjustments.
Tax rates and exemptions for 2024
In addition to changes in standard deductions, the IRS has also announced adjustments to tax rates for 2024. There are seven tax brackets, with rates ranging from 10% to 37%. The highest rate of 37% applies to individuals with income over $609,350 and married couples filing jointly with income over $731,200. At the other end, the 10% tax rate is for single filers earning $11,600 or less and married couples filing jointly earning less than $23,200.
Here’s a quick look at the updated brackets:
- 37% – Single income over $609,350, married couples filing jointly with income over $731,200
- 35% – Single income over $243,725, married couples filing jointly with income over $487,450
- 32% – Single income over $191,950, married couples filing jointly with income over $383,900
- 24% – Single income over $100,525, married couples filing jointly with income over $201,050
- 22% – Single income over $47,150, married couples filing jointly with income over $94,300
- 12% – Single income over $11,600, married couples filing jointly with income over $23,200
- 10% – Single income of $11,600 or less, married couples filing jointly with income less than $23,200
These rate changes could result in higher tax liabilities for individuals with higher incomes, while others may benefit from lower rates depending on their taxable income.
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Tax benefits and credits
The IRS has also announced tax changes to take place in 2025. They include an increase in the standard deduction for all filing statuses. The standard deduction for single taxpayers and married taxpayers will increase to $15,000, a $400 increase from 2024. Married couples filing jointly will see their standard deduction rise by $800 up to $30,000. Heads of households stand to get $600 up to $22,500 deduction on their standard deduction.
Current tax brackets applicable for the 2025 filing season will also change, whereby the single taxpayer earning above $626,350 and married taxpayers earning over $751,600 will fall under a 37% tax bracket. The adjustments are meant to address inflation so that when income rises because of inflation rather than real income growth, taxpayers are not paying higher taxes.
Overall, these changes in tax brackets, standard deductions, and credits are a show of the IRS’s concern to allow taxpayers to keep up with inflation. Now, as we are almost heading to the tax season, it becomes important to review the financial situation and benefit from maximum savings through these adjustments.
Let’s look at what 2025 holds
The IRS has also provided information on tax changes to take place in 2025. They include an increase in the standard deduction for all filing statuses. The standard deduction for single taxpayers and married taxpayers will increase to $15,000, a $400 increase from 2024. Married couples filing jointly will see their standard deduction rise by $800 up to $30,000. Heads of households stand to get a $600 to $22,500 deduction on their standard deduction.
Current tax brackets applicable for the 2025 filing season will also change, whereby the single taxpayer earning above $626,350 and married taxpayers earning over $751,600 will fall under a 37% tax bracket. The adjustments are meant to address inflation so that when income rises because of inflation rather than real income growth, taxpayers are not paying higher taxes.
Overall, these changes in tax brackets, standard deductions, and credits are a show of the IRS’s concern to allow taxpayers to move along with inflation. Now as we are almost heading to the tax season, it becomes important to review the financial situation and benefit from maximum savings through these adjustments.
