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Here Are the New 2025 Tax Brackets (And How They Could Impact You)

Your taxes could look a bit different for 2025. Here's what you need to know.

By Will Vitka

Edited by Chris Kissell

Updated Feb. 18, 2025

As if the U.S. tax code wasn't confusing enough, there are some changes in store for the 2025 tax season. Specifically, tax brackets are shifting, which might impact what you owe Uncle Sam.

Last fall, the IRS announced the new tax brackets for 2025. Knowing how taxes are changing can help you prepare yourself financially for what might be ahead.

Here are the new tax brackets and how they might impact you.

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2025's new tax brackets

Here are the new tax brackets for 2025.

2025 tax brackets for those married filing jointly (and surviving spouses):

10% — $0 to $23,850
12% — $23,850 to $96,950
22% — $96,950 to $206,700
24% — $206,700 to $394,600
32% — $394,600 to $501,050
35% — $501,050 to $751,600
37% — Greater than $751,600

2025 tax brackets for single filers:

10% — $0 to $11,925
12% — $11,925 to $48,475
22% — $48,475 to $103,350
24% — $103,350 to $197,300
32% — $197,300 to $250,525
35% — $250,525 to $626,350
37% — Greater than $626,350

Income tax brackets are adjusted annually to account for inflation. These adjustments help ensure taxpayers don't end up in higher tax brackets solely due to rising inflation. That helps maintain fairness in the tax system.

The standard deduction is also being tweaked in the following ways:

Married filing jointly and surviving spouses — $30,000 (up from $29,200 in 2024)
Heads of household — $22,500 (up from $21,900)
Everyone else — $15,000 (up from $14,600)

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Other rates that are changing

The IRS also announced some other tax rates that will shift in 2025:

For example, the alternative minimum tax exemption amount for unmarried individuals will increase to $88,100 or $68,650 for married individuals filing separately. The exemption starts phasing out at $626,350.

Married couples filing jointly will find that the alternative minimum tax exemption amount rises to $137,000. The phase-out begins at $1,252,700.

The earned income tax credit amount for taxpayers with three or more qualifying children is jumping to $8,046, a rise from $7,830 in 2024.

If you participate in a health flexible spending cafeteria plan, the dollar limitation for employee salary reductions is rising to $3,300, a $100 increase over 2024.

Qualified parking and transportation fringe benefits will increase the monthly limit by $10, to $325 for 2025.

The annual exclusion for gifts also will increase from $18,000 to $19,000.

Now at $130,000, the foreign-earned income exclusion gets a boost too after a $3,500 increase.

Estate taxes for those who passed during 2025 will have a $380,000 increase compared to the year before, with it now being at $13,990,000.

For parents or guardians who adopt a child with special needs, the maximum credit allowed for the 2025 tax year has increased by $470 at $17,280.

For more information, visit the IRS website or consult with your tax professional.

What do higher tax brackets mean for you?

The good news is that some taxpayers could see a smaller tax bill as tax brackets adjust higher. A larger standard deduction also should help lower tax bills for some.

Many taxpayers also are likely to get a bigger benefit from specific tax deductions for which they qualify.

However, any relief might be more modest than in recent years. In September 2024, Bloomberg Tax & Accounting projected this year's tax bracket changes, and the officially announced brackets show that the firm was spot-on in its predictions, getting all of them correct.

In its projection, Bloomberg noted that such changes are equivalent to a 2.8% adjustment in the brackets. "This is about half the increase in 2024, and a significant drop from the 7.1% increase in 2023," according to Bloomberg.

Of course, the lower adjustment is actually a cause for celebration, as it means inflation has finally cooled significantly.

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Which additional 2025 changes might help you cut tax bills?

Last year, the IRS announced that in 2025 taxpayers with a health savings account (HSA) can contribute $4,300 for an individual or $8,550 for a family. Those amounts are up from $4,150 and $8,300, respectively, in 2024.

Contribution limits for 401(k) plans increased by $500 in 2025 compared to the previous year, now capping out at $23,500. However, IRA annual contribution limits will stay at $7,000.

Making contributions to these types of accounts can save you on taxes both in 2025 and into the future.

Bottom line

Tax brackets will not change much for the 2025 season. A lot of that is due to cooling inflation from 2024.

Still, the changes create opportunities to make money moves that will improve your bottom line. If you are lucky, you might even see a reduced tax bill.

If you have questions about these changes and how to take advantage of them, consult a tax professional.

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