2024 and 2025 Federal Income Tax Brackets, Standard Deductions, Tax Rates

There is no longer a personal exemption due to the 2017 Tax Cuts and Jobs Act. Taxpayers whose net investment income exceeds the IRS limit ($200,000 for an individual taxpayer or head of household, $250,000 married filing jointly or qualified surviving spouse, or $125,000 married filing separately) are subject to a 3.8% net investment income tax (NIIT) on investment income above those limits.

Standard Deduction

The standard deduction is a specific figure that taxpayers can use to reduce their taxable income when they file their annual tax returns. Note that taxable income is your adjusted gross income (AGI) less any itemized deductions or your standard deduction.

2025 Standard Deductions

The deduction set by the IRS for the 2025 tax year is as follows:

The additional standard deduction amount for an individual who is aged or blind is $1,600. That amount increases to $2,000 for individuals who are unmarried and if they aren’t surviving spouses. The standard deduction for claiming a dependent is $1,350 or $450 plus the individual’s earned income—whichever is greater.

Capital Gains

Capital gains rates are lower than a taxpayer’s ordinary income rate. But they depend on the taxpayer’s taxable income and filing status. The maximum adjusted capital gains rates apply for both the regular income tax and the alternative minimum tax.

Your must pay a capital gains tax for the 2024 tax year if your income exceeds:

• $96,700 for married couples filing jointly
• $96,700 for surviving spouses
• $48,350 for married couples filing separately
• $64,750 for the head of a household
• $48,350 for single filers

In the 2024 tax year, the 15% rate applies to adjusted net capital gains for:

• Joint returns of up to $600,050
• Surviving spouses’ returns of up to $600,050
• Married individuals’ separate returns of up to $300,000
• Head of household returns of up to $566,700
• Single individual returns of up to $533,400

The applicable capital gains rate is set at 20% for any income amounts above these ceilings.

Individual Tax Credits

Earned Income Tax Credit (EITC)

The maximum amount of the earned income tax credit (EITC) for taxpayers whose self-reported incomes were in the lowest income bracket and the taxable income levels for its thresholds and ceilings are also adjusted for inflation.

The maximum credit for three or more children is $8,046 in the 2025 tax year. For married couples filing jointly, the phaseout of the credit begins at $30,470 of adjusted gross income (or earned income, if higher) and the phase out ends at $68,675.

Qualified Adoption Expenses

The credit for qualified adoption expenses, as well as the special credit for the adoption of a child with special needs, amount to $17,280 for 2025. The exclusion from an employee’s income for qualified adoption expenses that are paid or reimbursed under an employer plan will be increased to the same level.

Lifetime Learning Credit

The maximum $2,000 per return lifetime learning credit (LLC) for qualified educational expenses for a taxpayer, spouse, or dependent is phased out for taxpayers with MAGI in excess of $80,000 ($160,000 for joint returns). In recent years, the lifetime learning credit has not been adjusted or inflation.

Foreign Earned Income Exclusion

The foreign earned income exclusion is set by the IRS at $130,000 for the 2024 tax year.

Alternative Minimum Tax

The alternative minimum tax (AMT) applies to alternative minimum taxable income, such as regular taxable income with certain tax benefits added back, in excess of an exemption level.

The alternative minimum tax exemption levels for the 2025 tax year are as follows:

• $137,000 for joint returns and surviving spouses
• $88,100 for unmarried individuals (other than surviving spouses)
• $68,500 for married people’s separate returns

The alternative minimum tax rate is 28% for alternative minimum taxable income up to a maximum of $239,100 (for 2024) for returns of married couples and single individuals ($119,550 in 2024, for married filing separately).

Increased Allowances: Fringe Benefits, Medical Spending Accounts, and Estates

The monthly limit for qualified transportation and qualified parking fringe benefits is $325 for the 2025 tax year.

The maximum salary reduction for contributions to health flexible spending accounts (FSAs) is $3,300 for 2025. The maximum carryover of unused amounts for cafeteria plans is $660 for 2025.

For a decedent who died in 2025, the exemption level for the estate tax is set at $13.99 million for the 2024 tax year. The annual gift tax exclusion is $19,000 for 2025.

Retirement Plans

The IRS also sets limitations on retirement plan contributions and phaseout ranges. The income exclusion for employee contributions to employer retirement plans, such as 401(k)s, 403(b)s, 457 plans, and the federal government’s Thrift Savings Plan, is $23,000 for the 2024 tax year, filed in 2025. The catch-up contribution for employees ages 50 and older is $7,500. The limitation for SIMPLE (Savings Incentive Match Plan for Employees) retirement accounts is $16,000 for 2024.

Individual Retirement Accounts (IRAs)

The deductible amount for individual retirement account (IRA) contributions is $7,000 for 2024. People ages 50 and older can contribute an additional $1,000 each year.

The phaseout ranges for tax year 2024 are:

• If an individual is an active participant in an employer retirement plan, the deduction phaseout for adjusted gross incomes is $77,000–$87,000 for single individuals and heads of households, and $123,000–$143,000 for joint returns.
• For an IRA contributor who is not an active participant in another plan but whose spouse is an active contributor, the phaseout ranges from $230,000 to $240,000.
• For a married active contributor filing a separate return, there is no adjustment and the phaseout range will remain $0 to $10,000.

Roth IRAs

For the 2024 tax year, the phaseout ranges for Roth IRA contributions are $146,000 to $161,000 for single taxpayers and heads of households and $230,000 to $240,000 for joint returns. The Roth IRA phaseout for a married individual’s separate return remains at $0 to $10,000.

The Bottom Line

Every year, usually in November, the IRS announces rates and inflation adjustments that affect federal taxes for the coming tax year, including tax brackets, standard deductions, tax credits, and more. It’s important to be aware of any changes that the IRS makes to file your taxes properly and avoid overpayment or underpayment.