New Federal Income Tax Brackets for 2025 Revealed by IRS

On October 22, the IRS announced the new federal income tax brackets for 2025. The changes include alterations to each bracket, including the top one.

Changes to the Top Tax Bracket

The highest tax bracket, which includes single taxpayers earning more than $636,350 and couples earning more than $751,600, will now be subject to a 37 percent tax rate. This is an increase from the previous thresholds of $609,350 for singles and $731,200 for couples.

Adjustments to Other Tax Brackets

The other tax brackets have also seen changes. The new brackets, along with the previous income thresholds in parentheses, are as follows: - A 35 percent tax for singles earning more than $250,525 (previously $243,725) and married couples earning more than $501,050 (previously $487,450) - A 32 percent tax for singles earning more than $197,300 (previously $191,950) and married couples earning more than $394,600 (previously $383,900) - A 24 percent tax for singles earning more than $103,350 (previously $100,525) and married couples earning more than $206,700 (previously $201,050) - A 22 percent tax for singles with incomes over $48,475 (previously $47,150) and married couples earning more than $96,950 (previously $94,300) - A 12 percent tax for singles with incomes over $11,925 (previously $11,600) and married couples earning more than $23,850 (previously $23,200) - A 10 percent tax for singles with incomes of $11,925 or less (previously $11,600 or less) and married couples earning $23,850 or less (previously $23,200 or less)

Standard Deduction Increase

Additionally, the IRS has announced an increase in the standard deduction. For individuals, the standard deduction will increase by $400 to $15,000. For married couples, the standard deduction will increase by $800 to $30,000.

Bottom Line

The changes to the federal income tax brackets for 2025 will impact taxpayers at all income levels. It's important for individuals and couples to understand these changes and how they may affect their financial situation. What are your thoughts on these new tax brackets? Do you think they will have a significant impact on your financial situation? Feel free to share this article with your friends and discuss it. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.