The IRS has released updated federal income tax brackets for 2025, impacting how much Americans will owe in taxes. These new tax rates apply to income earned in 2025 and will be used when filing tax returns in 2026. Along with income tax changes, the standard deduction has increased, offering potential savings for many taxpayers. Read on to learn about the updated tax brackets, the new standard deduction amounts, and what these changes mean for you.
Updated Federal Tax Brackets for 2025
The federal tax system is progressive, meaning different portions of your income are taxed at different rates. Here are the updated tax brackets for 2025:
2025 Federal Tax Rates
- 37% for individuals earning over $626,350 (or $751,600 for married couples filing jointly)
- 35% for incomes over $250,525 ($501,050 for married couples)
- 32% for incomes over $197,300 ($394,600 for married couples)
- 24% for incomes over $103,350 ($206,700 for married couples)
- 22% for incomes over $48,475 ($96,950 for married couples)
- 12% for incomes over $11,925 ($23,850 for married couples)
- 10% for incomes below $11,925 ($23,850 for married couples)
These rates apply to taxable income, which is your total income minus deductions and credits.
What Happens After 2025?
If Congress doesn’t extend former President Donald Trump’s 2017 tax cuts, tax brackets will return to older rates, increasing taxes for many Americans. The rates would change to 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% starting in 2026.
Higher Standard Deduction for 2025
The standard deduction is the amount you can subtract from your taxable income before calculating what you owe. In 2025, it increases to:
- $30,000 for married couples filing jointly (up from $29,200 in 2024)
- $15,000 for single filers (up from $14,600 in 2024)
If Congress doesn’t extend Trump’s tax cuts, these higher standard deductions will expire after 2025, potentially increasing taxable income for many filers.
How These Changes Affect You
- Lower-income earners may see slightly less tax owed due to increased income thresholds.
- Middle-class taxpayers could benefit from the increased standard deduction.
- High earners in the top bracket will see little change unless the tax cuts expire in 2026.
- Future tax changes depend on Congress’ actions in 2025—if the tax cuts are not extended, many Americans could face higher taxes in 2026.
The IRS has adjusted tax brackets and standard deductions for 2025, slightly lowering tax burdens for many Americans. However, these changes may be temporary, as the current tax cuts expire in 2026 unless Congress acts. Staying informed about tax updates can help you plan and potentially save money on your future tax bill.
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