Raw: [Explore the IRS inflation-adjusted 2025 tax brackets, for which taxpayers will file tax returns in early 2026. ]
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On a yearly basis, the Internal Revenue Service (IRS) adjusts more than 60 tax provisions for inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power.
to prevent what is called “bracket creepBracket creep occurs when inflation pushes taxpayers into higher income tax brackets or reduces the value of credits, deductions, and exemptions. Bracket creep results in an increase in income taxes without an increase in real income. Many tax provisions—both at the federal and state level—are adjusted for inflation.
.” Bracket creep occurs when inflation, rather than real increases in income, pushes people into higher income tax bracketsA tax bracket is the range of incomes taxed at given rates, which typically differ depending on filing status. In a progressive individual or corporate income tax system, rates rise as income increases. There are seven federal individual income tax brackets; the federal corporate income tax system is flat.
or reduces the value they receive from credits and deductions.
The IRS previously used the Consumer Price Index (CPI) as a measure of inflation prior to 2018. However, with the TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.
Cuts and Jobs Act of 2017 (TCJA), the IRS now uses the Chained Consumer Price Index (C-CPI) to adjust income thresholds, deduction amounts, and credit values accordingly.
The new inflation adjustments are for tax year 2025, for which taxpayers will file tax returns in early 2026. On average, tax parameters that are adjusted for inflation will increase by about 2.8 percent.
2025 Federal Income Tax Brackets and Rates
In 2025, the income limits for all tax brackets and all filers will be adjusted for inflation and will be as follows (Table 1). The federal income tax has seven tax rates in 2025: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. The top marginal income tax rate of 37 percent will hit taxpayers with taxable incomeTaxable income is the amount of income subject to tax, after deductions and exemptions. For both individuals and corporations, taxable income differs from—and is less than—gross income.
above $626,350 for single filers and above $751,600 for married couples filing jointly.
2025 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, and Heads of Households
Tax RateFor Single FilersFor Married Individuals Filing Joint ReturnsFor Heads of Households
10%$0 to $11,925$0 to $23,850$0 to $17,000
12%$11,925 to $48,475$23,850 to $96,950$17,000 to $64,850
22%$48,475 to $103,350$96,950 to $206,700$64,850 to $103,350
24%$103,350 to $197,300$206,700 to $394,600$103,350 to $197,300
32%$197,300 to $250,525$394,600 to $501,050$197,300 to $250,500
35%$250,525 to $626,350$501,050 to $751,600$250,500 to $626,350
37%$626,350 or more$751,600 or more$626,350 or more
Source: Internal Revenue Service, “Revenue Procedure 2024-40.”
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Standard DeductionThe standard deduction reduces a taxpayer’s taxable income by a set amount determined by the government. It was nearly doubled for all classes of filers by the 2017 Tax Cuts and Jobs Act (TCJA) as an incentive for taxpayers not to itemize deductions when filing their federal income taxes.
and Personal Exemption
The standard deduction will increase by $400 for single filers and by $800 for joint filers (Table 2). Seniors over age 65 may claim an additional standard deduction of $2,000 for single filers and $1,600 for joint filers.
The personal exemption for 2025 remains at $0 (eliminating the personal exemption was part of the Tax Cuts and Jobs Act of 2017 (TCJA).
Table 2. 2025 Standard Deduction
Filing StatusDeduction Amount
Single$15,000
Married Filing Jointly$30,000
Head of Household$22,500
Source: Internal Revenue Service, “Revenue Procedure 2024-40.”
Alternative Minimum Tax
The alternative minimum tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S.
. This parallel income tax system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two.
The AMT uses an alternative definition of taxable income called alternative minimum taxable income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, the exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent.
The AMT exemption amount for 2025 is $88,100 for singles and $137,000 for married couples filing jointly (Table 3).
Table 3. 2025 Alternative Minimum Tax (AMT) Exemptions
Filing StatusExemption Amount
Unmarried Individuals$88,100
Married Filing Jointly$137,000
Source: Internal Revenue Service, “Revenue Procedure 2024-40.”
In 2025, the 28 percent AMT rate applies to excess AMTI of $239,100 for all taxpayers ($119,550 for married couples filing separate returns).
AMT exemptions phase out at 25 cents per dollar earned once AMTI reaches $626,350 for single filers and $1,252,700 for married taxpayers filing jointly (Table 4).
Table 4. 2025 Alternative Minimum Tax (AMT) Exemption Phaseout Thresholds
Filing StatusThreshold
Unmarried Individuals$626,350
Married Filing Jointly$1,252,700
Source: Internal Revenue Service, “Revenue Procedure 2024-40.”
Earned Income Tax CreditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly.
The maximum earned income tax credit (EITC) in 2025 for single and joint filers is $649 if the filer has no children (Table 5). The maximum credit is $4,328 for one child, $7,152 for two children, and $8,046 for three or more children.
Table 5. 2025 Earned Income Tax Credit (EITC) Parameters
Filing StatusNo ChildrenOne ChildTwo ChildrenThree or More Children
Single or Head of HouseholdIncome at Max Credit$8,490 $12,730 $17,880 $17,880
Maximum Credit$649 $4,328 $7,152 $8,046
Phaseout Begins$10,620 $23,350 $23,350 $23,350
Phaseout Ends (Credit Equals Zero)$19,104 $50,434 $57,310 $61,555
Married Filing JointlyIncome at Max Credit$8,490 $12,730 $17,880 $17,880
Maximum Credit$649 $4,328 $7,152 $8,046
Phaseout Begins$17,730 $30,470 $30,470 $30,470
Phaseout Ends (Credit Equals Zero)$26,214 $57,554 $64,430 $68,675
Source: Internal Revenue Service, “Revenue Procedure 2024-40.”
Child Tax Credit
The maximum child tax credit is $2,000 per qualifying child and is not adjusted for inflation. The refundable portion of the child tax credit is adjusted for inflation and will remain at $1,700 for 2025.
Capital Gains TaxA capital gains tax is levied on the profit made from selling an asset and is often in addition to corporate income taxes, frequently resulting in double taxation. These taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment.
Rates and Brackets (Long-Term Capital Gains)
Long-term capital gains face different brackets and rates than ordinary income (Table 6.)
Table 6. 2025 Capital Gains Tax Brackets
For Unmarried Individuals, Taxable Income OverFor Married Individuals Filing Joint Returns, Taxable Income OverFor Heads of Households, Taxable Income Over
0%$0 $0 $0
15%$48,350 $96,700 $64,750
20%$533,400 $600,050 $566,700
Source: Internal Revenue Service, “Revenue Procedure 2024-40.”
Qualified Business Income Deduction (Sec. 199A)
The Tax Cuts and Jobs Act of 2017 (TCJA) includes a 20 percent deduction for pass-through businesses. Limits on the deduction begin phasing in for taxpayers with income above $197,300 (or $394,600 for joint filers) in 2025 (Table 7).
Table 7. 2025 Qualified Business Income Deduction Thresholds
Filing StatusThreshold
Unmarried Individuals$197,300
Married Filing Jointly$394,600
Source: Internal Revenue Service, “Revenue Procedure 2024-40.”
Annual Exclusion for Gifts
In 2025, the first $19,000 of gifts to any person are excluded from tax, up from $18,000. The exclusion is increased to $190,000 from $185,000 for gifts to spouses who are not citizens of the United States.
Note: the Tax Foundation is a 501(c)(3) educational nonprofit and cannot answer specific questions about your tax situation or assist in the tax filing process.
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DataNovember 9, 2023October 22, 2024
2024 Tax Brackets4 min read
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TopicsAlternative Minimum Tax (AMT)Business Tax Compliance and ComplexityBusiness Tax Expenditures, Credits, and DeductionsBusiness TaxesDataIndividual and Consumption TaxesIndividual Capital Gains and Dividends TaxesIndividual Income and Payroll TaxesIndividual Tax Compliance and ComplexityIndividual Tax Expenditures, Credits, and DeductionsSmall Business TaxesTax administration
TagsTags:Child Tax Credit (CTC)Earned Income Tax Credit (EITC)InflationInflation-IndexingPass-Through BusinessesQualified Business Income Deduction (Sec. 199A)Tax Cuts and Jobs Act (TCJA)Tax Filing
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ExpertAlex DuranteEconomist
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