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The 2025 IRS Tax Brackets Are Out: Here’s What’s New

The IRS has released the 2025 tax brackets, featuring a modest 2.8% inflation adjustment—the smallest in several years. Below is a quick rundown of the updates.


  • Standard Deduction

    • Married Couples Filing Jointly: $30,000

    • Single Filers: $15,000

  • Annual Gift Tax Exclusion: Increases to $19,000 per recipient

  • Estate Tax Exemption: Now $13.99 million, up from $13.61 million

  • Earned Income Tax Credit (EITC): Maximum credit rises to $8,046 for eligible families


Understanding Your Tax Bracket

Remember, tax brackets are progressive—only income above each threshold is taxed at the higher rate. For instance, if you're married filing jointly, the first $23,850 of your taxable income is taxed at 10%, with any amount above that taxed at the next bracket's rate.


Unchanged for 2025

A few key provisions remain the same:

  • State and Local Tax (SALT) Deduction Cap: Stays at $10,000

  • Child Tax Credit: Remains at $2,000 per qualifying child


With these updates, now is an excellent time to review your tax strategy for the upcoming year to maximize savings and avoid surprises.

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