One notable change for the 2025 year is the standard deduction, which is the portion of income that can reduce a person’s tax bill because it is not subject to tax. For single taxpayers and married individuals filing separately, the standard deduction rises by $400 from 2024, to $15,000 in 2025. For married couples filing jointly, the standard deduction rises by $800 to $30,000.
Next year, the annual income thresholds for the tax brackets will increase by 2.8%, nearly half of the 5.4% increase for 2024. This smaller increase is reportedly due to inflation cooling off this year compared to previous years.
The 2025 tax year will be the last year covered under the 2017 Tax Cuts and Jobs Act, which was aimed at reducing tax rates. If Congress allows the act to expire, tax rates are expected to increase in 2026 with the top tax bracket estimated to increase by approximately 2.6%.