Taxpayers will receive higher standard deductions in 2025, IRS announces

NEW YORK — U.S. taxpayers will once again benefit from higher standard deductions in 2025, allowing them to shield more of their money from taxation on future income.

The IRS detailed the increases in its annual inflation adjustments announced Tuesday. For single taxpayers and married people filing separately in the 2025 tax year, the standard deduction increases to $15,000 – a $400 increase from 2024.

For married couples filing jointly, this standard deduction will be $30,000 in 2025, an $800 jump from the previous year. And heads of household will receive a standard deduction of $22,500, a $600 increase from 2024.

Income limits for all seven federal tax brackets have also been revised upward. The top tax rate, which remains at 37%, will cover income in excess of $626,350 for individual taxpayers in the 2025 tax year, for example – compared to $609,350 in 2024.

The IRS makes these adjustments for each tax year to account for inflation, which has recently been trending downward. Last month, US inflation fell to its lowest point in more than three years, signaling some encouraging economic news – but Americans still feel some major price pressures.

“Core” prices, an indicator of underlying inflation, remained high in September, driven by rising costs for medical care, clothing, car insurance and airfares.

While taxpayers will again see higher standard deductions in 2025, the increases announced Tuesday are smaller than those seen in recent years. In tax adjustments announced last year, for example, the IRS increased the standard deduction for single filers by $750 between tax years 2023 and 2024 — and by $1,500 and $1,100 for married couples and heads of household, respectively. .