IRS released federal income tax brackets for 2024

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The Internal Revenue Service has released federal income tax brackets for 2025, which are adjusted for inflation.

When filing taxes next year on 2024 income, the standard deduction will increase to $30,000 for married couples and $15,000 for single taxpayers, the IRS announced Tuesday.

This represents an increase from the 2024 standard deduction of $29,200 and $14,600, respectively. The 2017 federal tax cuts included higher deductions that will end next year if Congress does not act to extend the tax breaks.

Federal income tax brackets show how much you owe on each part of your taxable income. The standard deduction is simply subtracted from your income, then the balance will be taxed at the following rates for 2025:

37% for individual filers with income above $626,350, or $751,600 for married couples filing jointly
35% for income above $250,525, or $501,050 for married couples filing jointly
32% for income above $197,300, or $394,600 for married couples filing jointly
24% for income above $103,350, or $206,700 for married couples filing jointly
22% for income above $48,475, or $96,950 for married couples filing jointly
12% for income above $11,925, or $23,850 for married couples filing jointly
10% for incomes of $11,925 or less and $23,850 or less for married couples filing jointly

For a single person with a taxable income of $58,000, everything up to $11,925 would be taxed at 10%, everything between $11,926 and $48,475 would be taxed at 12% and everything between $48,576 and $58,000 would be taxed at 22%.

After 2025, the lower tax rates passed as part of the 2017 federal tax cuts – known as the Tax Cuts and Jobs Act – will expire without congressional action.

An expiration would return to the 2017 federal rates of 10%, 15%, 25%, 28%, 33%, 35% and 39.60%.

Credits, deductions and exclusions

The lifetime estate tax credit – estates of those who died in 2024 – increases to $13,990,000. Donations of less than $19,000 are tax-exempt, up from $18,000 in 2024. The Earned Income Tax Credit – aimed at low- and moderate-income working families with three or more children – will increase to $8,046, compared to $7,830 in 2024.

Meanwhile, the alternative minimum tax exemption increases to $88,100 for individual filers – $2,400 more than in 2024 – while it amounts to $68,650 for married individuals filing separately. The exemption for individual filers will be phased out at $626,350.

For married couples filing jointly, the exemption starts at $137,000 and begins to phase out at $1,252,700.

“An alternative minimum tax sets a floor on the percentage of taxes a tax filer must pay to the government, regardless of how many deductions or credits they may claim,” according to an Investopedia article.

What will stay the same next year?

Personal exemptions will remain at 0, as they have since 2018 under the Trump federal tax cuts. There will still be no limits on itemized deductions.

The adjusted gross income taxpayers use to determine their reduction under the Lifetime Education Credit – which reduces your taxes to offset education costs – will remain unchanged. It is currently being phased out for taxpayers earning $80,000 gross income individually, or $160,000 filing jointly.

Daniel Munoz covers business, consumerism, labor and the economy for NorthJersey.com and The Record.

E-mail: [email protected]; Twitter:@danielmunoz100 and Facebook

2 minutes of reading

Credits, deductions and exclusions

What will stay the same next year?

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