(NEXSTAR) — It’s official: 2025 will be the year millions of Americans earn more take-home pay with each paycheck thanks to the latest tax code inflation adjustments The IRS announced on tuesday.
More than 60 tax provisions will change, all of which will impact the 2025 tax year. This means it won't apply until you file your taxes in 2026.
One of the most notable changes announced by the IRS is an increase in the standard deduction and changes to individual tax brackets.
Basic deduction increases
Starting with the 2025 tax year, the standard deduction will increase by $400 to $15,000 from the current $14,600 for single and married taxpayers filing separately. If you're married and filing jointly, your standard deduction increases by $800 to $30,000, while if you're the head of a household, your standard deduction increases by $600 to $22,500.
Please remember, standard deduction Reduce how much of your income is taxed.
Tax classification for tax year 2025
Just like last year, the IRS is also making tax adjustments. These determine the taxable portion of your income after the standard deduction or itemized deductions.
Below is a table that breaks down each of these marginal tax categories.
| If your taxable income exceeds: | unpaid taxes |
|---|---|
| $626,350 ($751,600 for married couples filing jointly) | 37% |
| $250,525 ($501,050 for married couples filing jointly) | 35% |
| $197,300 ($394,600 for married couples filing jointly) | 32% |
| $103,350 ($206,700 for married couples filing jointly) | twenty four% |
| $48,475 ($96,950 for married couples filing jointly) | twenty two% |
| $11,925 ($23,850 for married couples filing jointly) | 12% |
| Up to $11,925 (up to $23,850 for married couples filing jointly) | 10% |
All of these income thresholds have increased slightly from last year. For example, the lowest level increased by $325 and the second highest level increased by $1,325.
What remains unchanged is the top tax rate. According to the IRS, the percentage remains at 37% for single individual taxpayers with incomes above $626,350 and married couples filing jointly with incomes above $751,600.
What else is changing?
There are several other notable changes that could affect a wide range of taxpayers.
For example, for tax year 2025, the maximum Earned Income Tax Credit increases from $7,830 to $8,046 for qualified taxpayers with three or more qualifying children.
The alternative minimum tax exemption amount for individual filers will increase to $88,100, an increase of $2,400 from last year. For married people filing separately, the exemption amount increases to $68,650. For both groups, the exemption will phase out at $626,350.
For married couples filing together, the exemption increases to $137,000 and phases out at $1,252,700.
For more information on changes to eligible transportation fringe benefits, health savings accounts, foreign earned income exclusions, adoption credits, and other updated information, please visit IRS website.
What remains the same for the 2025 tax year?
Although there are many updates for the next tax year, some areas of the tax code will not be updated.
This also includes personal deductions, which will remain at zero as in the current tax year. There will continue to be no limits on itemized deductions, and there will be no adjustment to the adjusted gross income amount that taxpayers use to determine reductions in the Lifetime Learning Credit.
You can read about marginal tax amounts, standard deductions, and other changes expected for the 2024 tax year here.
The next two tax days will both fall on April 15, a Tuesday in 2025 and a Wednesday in 2026, so they won't be interrupted by a weird calendar year.
Jeremy Tanner contributed to this report.
