The IRS has announced the new tax brackets for 2025

The IRS unveiled new inflation-adjusted tax brackets for 2025 on Tuesday, with yearly income levels rising by around 2.8% from 2024, the smallest increase in several years.

Each fall, the IRS publishes inflation-adjusted modifications to the tax rates and dozens of other regulations for the next tax year. Because inflation increased throughout the epidemic, bracket adjustments have grown in recent years, reaching 7% in 2023 and 5.4% in the present year.

For example, the new 10% tax rate level for married couples filing jointly will be $23,850 in 2025, up 2.8% from $23,200 in 2024.

In 2025, the standard deduction for married couples filing jointly will be $30,000, a 2.7% increase from the current tax year's $29,200. Meanwhile, the standard deduction for solo taxpayers and married couples filing separate forms will climb to $15,000 from $14,600 this year.

According to the Tax Policy Center, the standard deduction, which reduces an individual's taxable income, is used by the vast majority of taxpayers. For example, a married couple earning $100,000 together might use the 2025 standard deduction to lower their taxable income to $70,000.

Taxation in the United States is progressive, which means that tax rates rise as people's incomes rise. However, some people believe that their top rate is the amount they will pay on all of their income. Instead, the brackets show the percentage of your income that will be taxed.

For example, married taxpayers who file jointly and earn more than $23,850 (the top level for the 10% rate in 2025) may owe $2,385 in federal income tax — or 10% of their first $23,850 in earnings — and then 12% of any income above that amount, up to $96,950. (In actuality, a couple in these brackets may owe little or receive a refund because of the standard deduction, as well as additional deductions and tax credits.)

Individuals earning up to $48,350 and married couples earning up to $96,700 will be subject to a 0% tax rate in 2025. Single filers earning between $48,350 and $533,400 pay a 15% rate, while those earning more than $533,400 pay 20%.

Married couples earning between $96,700 and $600,050 will pay 15%, while those earning more than that amount would pay 20%.

The federal estate-tax exclusion amount, which is the monetary figure for how much in assets can be exempt from estate taxes, will grow to $13.99 million next year from $13.61 million in 2024.