The Internal Revenue Service (IRS) makes annual adjustments to tax brackets to account for inflation, which impacts the amount taxpayers owe. Understanding these changes is key to effective tax planning. Here’s what’s new for 2025:
The tax year 2024 adjustments described below generally apply to income tax returns filed in 2025. The tax items for the tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:
The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023. For heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.
Marginal rates: For 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).
The other rates are:
35% for incomes over $243,725 ($487,450 for married couples filing jointly)
32% for incomes over $191,950 ($383,900 for married couples filing jointly)
24% for incomes over $100,525 ($201,050 for married couples filing jointly)
22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)
The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
The tax year 2024 maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, an increase of from $7,430 for the tax year 2023. The revenue procedure contains a table providing the maximum EITC amount for other categories, income thresholds, and phase-outs.
Source IRS.
Comments