The IRS has announced key inflation adjustments for the 2025 tax year, and these changes will impact taxpayers across the board. Understanding how these updates affect you can help you plan ahead and avoid surprises come tax season. Here’s a summary of the most notable adjustments.
New Federal Tax Brackets for 2025
The tax brackets for 2025 have been adjusted for inflation, meaning the income thresholds for each tax rate have increased. Here’s a quick overview of the new brackets:
2025 Federal Income Tax Brackets
For individual/single taxpayers:
- 10%: Income up to $11,925
- 12%: Income over $11,925 up to $48,475
- 22%: Income over $48,475 up to $103,350
- 24%: Income over $103,350 up to $197,300
- 32%: Income over $197,300 up to $250,525
- 35%: Income over $250,525 up to $626,350
- 37%: Income over $626,350
For married couples filing jointly:
- 10%: Income up to $23,850
- 12%: Income over $23,850 up to $96,950
- 22%: Income over $96,950 up to $206,700
- 24%: Income over $206,700 up to $394,600
- 32%: Income over $394,600 up to $501,050
- 35%: Income over $501,050 up to $751,600
- 37%: Income over $751,600
These adjustments are designed to prevent “bracket creep,” where inflation pushes taxpayers into higher tax brackets despite no real increase in purchasing power.
Increased Standard Deductions
The standard deduction has also seen a significant increase for 2025:
- Single Filers: $15,000 (up from $14,600 in 2024)
- Married Filing Jointly: $30,000 (up from $29,200)
- Heads of Household: $22,500 (up from $21,900)
These changes will benefit many taxpayers, especially those who don’t itemize deductions, by reducing their taxable income.
What These Changes Mean for You
For most taxpayers, the adjustments mean slightly lower tax bills if your income remains consistent with the previous year. However, these changes also affect how you might structure deductions, contributions, and other financial decisions.
Let Murray Moyer PLLC Help You Navigate Tax Season
Navigating these changes can be complex, especially if you’re dealing with unique tax circumstances, self-employment income, or bookkeeping challenges. At Murray Moyer PLLC, we specialize in helping individuals and businesses in Raleigh and beyond manage their tax issues and financial records with confidence.
Our team can help you:
- Maximize tax savings under the new 2025 rules
- Resolve tax disputes and address IRS concerns
- Streamline bookkeeping and accounting for your business
Contact us today to schedule a consultation and take the stress out of tax season. Let us help you make the most of the new tax adjustments while keeping your finances in order.
Written by Justin Moyer on December 18, 2024.