IRS Adjusts 2025 Tax Brackets for Inflation

The IRS has announced new federal income tax brackets and raised the standard deduction for 2025 to adjust for inflation, impacting all U.S. taxpayers who will see these changes when filing in 2026. The standard deduction will rise to $30,000 for married couples filing jointly and $15,000 for single filers. Income thresholds for each tax bracket have been adjusted, with the top rate of 37% applicable to individuals earning $626,350 or more and married couples making $751,600 or more. These adjustments are intended to prevent 'bracket creep,' where inflation shifts taxpayers into higher tax brackets without an actual increase in real income. Additional changes include higher limits for earned income tax credits and adjustments in capital gains, estate, and gift tax exemptions. The modifications reflect inflation's cooling trend, with a 2.8% increase in income thresholds for 2025, significantly lower than previous years.