The IRS has announced new federal income tax brackets and standard deductions for 2025.
In its announcement Tuesday, the agency raised the income thresholds for each bracket, which applies to tax year 2025 for returns filed in 2026. The top rate of 37% applies to individuals with taxable income above $626,350 and married couples filing jointly earning $751,600 or more for 2025.
The IRS also boosted figures for dozens of other provisions, including long-term capital gains brackets, estate and gift tax exemption and eligibility for the earned income tax credit, among others.
Federal income tax brackets show how much you owe on each part of your “taxable income,” which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
After 2025, lower taxes enacted by former President Donald Trump will sunset without action from Congress.
If the provision expires, the tax brackets will revert to 2017 levels, shifting to 10%, 15%, 25%, 28%, 33%, 35% and 39.6%.