2025 Federal Tax Bracket Adjustments

Each year, the IRS updates the income thresholds for federal tax brackets to keep pace with inflation. These changes help prevent “bracket creep,” which happens when your income rises due to inflation but your tax rate increases even though your buying power hasn’t.

What’s New in 2025?

The tax rates remain the same, but the income thresholds for each bracket have increased:

For Single Filers:

• 10%: $0 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

For Married Filing Jointly:

• 10%: $0 to $23,850

• 12%: $23,851 to $96,950

• 22%: $96,951 to $206,700

• 24%: $206,701 to $394,600

• 32%: $394,601 to $501,050

• 35%: $501,051 to $751,600

• 37%: Over $751,600

Other Inflation Adjustments for 2025:

• Standard Deduction: $15,000 (single), $30,000 (MFJ), $22,500 (head of household)

• AMT Exemption: $88,100 (single), $137,000 (MFJ)

• Earned Income Credit: Up to $8,046 for 3+ children

• Qualified Transportation Fringe Benefit: $325/month

• Health FSA Salary Reduction Limit: $3,300

• FSA Carryover Limit: $660

• Foreign Earned Income Exclusion: $130,000

• Estate Tax Exemption: $13.99 million

• Gift Exclusion: $19,000

What Should You Do?

Review your income and tax withholding to ensure you're aligned with these changes. Tax bracket shifts and higher thresholds could offer planning opportunities — especially for retirement contributions, capital gains timing, and flexible benefit elections for 2025.

Want personalized guidance? Schedule a consultation with one of our tax professionals.

Source: IRS – Tax Inflation Adjustments for 2025