The Internal Revenue Service (IRS) has released its full list of changing tax rules for 2025, and Americans are likely to see major updates to standard deductions and certain tax credits.
The IRS annually updates its inflation adjustments for each tax and the new rules will go into effect for tax returns filed starting in the 2026 filing season.
In 2026, for the tax year 2025, the standard deduction got a $400 boost, making it $15,000 for single filers. Married couples filing jointly will see a standard deduction of $30,000, which is up $800 from 2024.
“The higher standard deduction benefits those who do not itemize by allowing them to claim a larger deduction, reducing their taxable income,” Kevin Thompson, a finance expert and founder and CEO of 9i Capital Group, told Newsweek. “However, it affects taxpayers in high-cost-of-living states like New York and California, where property taxes are higher.”
A sign at the front of the IRS headquarters building on September 15 in Washington, D.C. The IRS announced its new rules for the 2025 tax year.
J. David Ake/Getty Images
The standard deduction refers to the portion of your income that is not subject to taxes, which essentially reduces the amount of your taxable income.
For heads of household in 2025, the standard deduction will be $22,500, up $600 from the amount for tax year 2024.
Marginal tax rates will also be pivotal in 2025. While the top tax rate will stay at 37 percent for single taxpayers making more than $626,350, there are important numbers to keep in mind for taxpayers bringing in different levels of income.
The rest of the marginal rates for tax year 2025 are as follows:
- 35 percent for incomes over $250,525 ($501,050 for married couples filing jointly).
- 32 percent for incomes over $197,300 ($394,600 for married couples filing jointly).
- 24 percent for incomes over $103,350 ($206,700 for married couples filing jointly).
- 22 percent for incomes over $48,475 ($96,950 for married couples filing jointly).
- 12 percent for incomes over $11,925 ($23,850 for married couples filing jointly).
- 10 percent for incomes $11,925 or less ($23,850 or less for married couples filing jointly).
“The jump from 37 percent to 39.6 percent at the top might grab headlines, but it’s the bracket creep that’ll affect more Americans,” Michael Ryan, a finance expert and founder of michaelryanmoney.com, told Newsweek. “Many of my former clients in the 24 percent bracket could find themselves pushed into 28 percent.”
While the marginal tax rate has stayed in the 30 percents for the top earners since 2000, it historically has gone as high as the 90s during the 1940s to 1960s.
There will also be different minimum tax exemption amounts in 2025.
For unmarried people, the exemption amount climbs to $88,100 ($68,650 for married individuals filing separately) and phases out at $626,350. For married couples filing jointly, the exemption amount is going up to $137,000 and begins to phase out at $1,252,700.
Taxpayers who get an earned income credit if they have three or more children will see a new maximum tax credit of $8,046. That’s up from $7,830 for the 2024 tax year.
Meanwhile those with medical savings accounts will see yearly deductibles of at least $2,850 for self-only coverage and a maximum out-of-pocket expense of $5,700.
The adoption credit is also changing next year, with the maximum credit now up to $17,280 for those who adopt a child with special needs.
Personal exemption, itemized deduction and lifetime learning credit rules will stay the same. That means there will continue to be no limit on the number of itemized deductions for the tax year 2025.
“These changes aren’t just abstract policies, they’re kitchen table issues that affect real families’ budgets,” Ryan said. “I’ve sat at countless kitchen tables helping families plan for tax changes, and the key has always been proactive planning, not reactive scrambling.”
