The IRS has announced new federal income tax brackets and standard deductions for 2025, with higher income thresholds for each bracket. The top rate of 37% applies to individuals with taxable income above $626,350 and married couples filing jointly earning $751,600 or more. The IRS also increased figures for other provisions, including long-term capital gains brackets, estate and gift tax exemptions, and eligibility for the child tax credit.
After 2025, taxes enacted by former President Donald Trump will expire unless Congress takes action, resulting in a reversion to 2017 tax bracket levels. The standard deduction will also rise in 2025 to $30,000 for married couples filing jointly and $15,000 for single filers. Trump’s tax cuts included higher standard deductions, which will sunset after 2025 unless extended by Congress.
Federal income tax brackets for 2025 include rates of 37%, 35%, 32%, 24%, 22%, 12%, and 10% based on taxable income levels for both individuals and married couples filing jointly. Taxable income is calculated by subtracting deductions from adjusted gross income. The IRS’s announcement applies to tax year 2025 and returns filed in 2026.
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