Tax News
Goodbye to the 2024 standard deduction: this is the updated deduction by filing status for 2025
Get ready for tax season These are the new tax rates you must pay based on your income in 2025.
As the year comes to an end, it is the perfect time to prepare for the 2025 tax season. The Internal Revenue Service (IRS) will accept and process returns for the 2024 tax year starting next year. The 2025 tax season is anticipated to kick off in late January and conclude in mid-April, making it essential for taxpayers to file and remit payments before the deadline to avoid penalties and fines. Here are the new tax rates that will apply based on your income for next year.
Under federal tax law, taxpayers are allowed to deduct certain personal expenses. This reduces taxable income, which in turn reduces taxes owed and increases refunds. The IRS offers two options for this: the standard deduction or itemizing deductions.
Changes to the standard deduction for the 2025 tax season
The standard deduction is a fixed sum of income you can subtract from your taxable income without providing details about the deduction. As per official IRS information, the standard deduction amounts for the 2024 tax year are:
- Married couples filing jointly: $29,200 per year.
- Single taxpayers and married individuals filing separately: $14,600.
- Heads of household: $21,900.
However, the standard deduction does not apply:
- If a taxpayer and his or her spouse are married but want to file their taxes separately and the spouse plans to itemize deductions,
- If a taxpayer or his or her spouse (if filing a joint return) was a nonresident alien at any time during the tax year;
- If a taxpayer files a return covering a period of less than one year because the taxpayer's annual accounting period has changed.
The IRS updates the tax brackets for the 2025 tax season
Annually, the IRS determines the tax bracket, which consists of the percentage of taxes owed based on taxpayers' taxable income.
Taxable income includes any income liable for federal taxes, regardless of whether it was earned. Your filing status influences your tax rate.
For the tax year 2024, due in 2025, here are the tax rates corresponding to your income:
- 37% for single individual taxpayers with income over $609,350 ($731,200 for married couples filing jointly).
- 35% for income over $243,725 ($487,450 for married couples filing jointly).
- 32% for income over $191,950 ($383,900 for married couples filing jointly).
- 24% for income over $100,525 ($201,050 for married couples filing jointly).
- 22% for income over $47,150 ($94,300 for married couples filing jointly).
- 12% for income over $11,600 ($23,200 for married couples filing jointly).
- 10% for incomes of $11,600 or less ($23,200 or less for married couples filing jointly).
In such situations, or if the taxpayer prefers, they can itemize their deductions. When personal deductions surpass the standard deduction, the taxpayer gains a larger advantage since it decreases their taxable income and can lead to a lower tax rate.
Individuals with incomes below the standard deduction threshold are not legally obligated to file a tax return. Nevertheless, they may file to be eligible for specific tax credits.