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Key Takeaways
- The IRS has updated its tax brackets, standard deduction, and other items for the 2025 tax year.
- Dollar values have been adjusted to reflect inflation, with tax brackets rising about 2.8%.
- The IRS adjusts income tax thresholds every year so that taxpayers pay the same proportion of their income regardless of changes in the cost of living.
Here’s a minor upside of inflation: if your income and deductions stay the same this year as last year, you’ll pay less taxes.
The IRS said Tuesday that tax brackets, the standard deduction, and other key items on federal income taxes have been updated to adjust for inflation. These updates apply to 2025 earnings and are applicable to the returns filed in 2026.
The standard deduction rose $400 to $15,000 for an individual, and double that for married couples filing jointly. The increased standard deduction means a larger amount of your income won’t count toward your tax liability.
Tax brackets were also adjusted, meaning you’ll have to earn about 2.8% more than last year before your income is taxed at a higher rate.
| 2025 Federal Income Tax Brackets | ||
|---|---|---|
| Tax rate | Income over | Income for married couples filing jointly |
| 35% | $250,525 | $501,050 |
| 32% | $197,300 | $$394,600 |
| 24% | $103,350 | $206,700 |
| 22% | $48,475 | $96,950 |
| 12% | $11,925 | $23,850 |
| 10% | $0 | $0 |
The IRS updates key values in the tax code every year to keep up with changes in the cost of living, based on an inflation measure called the Chained Consumer Price Index. Because inflation has slowed dramatically since 2022, this year’s adjustments were relatively small compared to recent years and close to the typical changes in the pre-pandemic era.
In addition to changing the tax brackets, amounts were changed for alternative minimum tax exemptions, earned income tax credits, and several other items.