Additional Coverage:
The Internal Revenue Service (IRS) has released updated tax brackets and standard deductions for 2025.
Income thresholds for each tax bracket have been adjusted to account for inflation. The highest tax rate of 37% will apply to individuals earning over $626,350 and married couples earning over $751,600 in 2025.
The standard deduction will also increase. Married couples filing jointly can claim $30,000, and single taxpayers can claim $15,000.
Additionally, various other tax provisions have been revised, including long-term capital gains brackets, estate and gift tax exemptions, and eligibility for the earned income tax credit.
It’s worth noting that the lower taxes implemented under former President Trump will expire in 2025 unless Congress acts. If this provision expires, tax brackets will return to 2017 levels.
The IRS’s announcement provides taxpayers with advanced notice of the changes to come. However, it’s important to stay informed about any potential legislative actions that could affect these tax provisions further.