2025 IRS Tax Brackets: Inflation Adjustments Are Here
The IRS has announced the inflation-adjusted tax brackets for the tax year 2025 (filing in 2026). The news is good: limits have been raised, meaning more of your income might fall into a lower tax bracket compared to last year.
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Standard Deduction Increases
If you don't itemize, you can claim the standard deduction. For 2025, it has increased to:
- Single Filers: $15,000 (up from $14,600)
- Married Filing Jointly: $30,000 (up from $29,200)
- Head of Household: $22,500
2025 Tax Brackets (Single Filers)
| Tax Rate | Taxable Income |
|---|---|
| 10% | Up to $11,925 |
| 12% | $11,926 to $48,475 |
| 22% | $48,476 to $103,350 |
| 24% | $103,351 to $197,300 |
| 32% | $197,301 to $250,525 |
| 35% | $250,526 to $626,350 |
| 37% | Over $626,350 |
What It Means for You
Your tax rate is "marginal". Even if you earn $100,000, you don't pay 22% on all of it. You pay 10% on the first chunk, 12% on the next, and only 22% on the income above $48,476.
Strategy: Contribute to a Traditional 401(k) to lower your taxable income. Every dollar you contribute comes "off the top", saving you tax at your highest marginal rate (e.g., 22% or 24%).