Taxpayers will get higher standard deductions in 2025, IRS announces

NEW YORK– U.S. taxpayers will see higher standard deductions again in 2025, allowing them to shield more of their money from taxes on future returns.

The Domestic Tax Authorities detailed the increases in its annual inflation adjustments announced on Tuesday. For single taxpayers and married individuals filing separately in tax year 2025, the standard deduction increases to $15,000 – an increase of $400 from 2024.

For couples filing jointly, the standard deduction for 2025 is $30,000, an increase of $800 from the year before. And heads of households will receive a standard deduction of $22,500, an increase of $600 from 2024.

Income thresholds for all seven levels of the federal tax brackets were also adjusted upward. For example, the top tax rate, which remains 37%, will cover incomes of more than $626,350 for single taxpayers in the 2025 tax year – up from $609,350 in 2024.

The tax authorities make such adjustments for each tax year to take into account inflation, which has been on a downward trend recently. Inflation in the US last month dropped to its lowest point in more than three years, marking encouraging economic news – but Americans are still feeling significant price pressure.

Core prices, a gauge of underlying inflation, remained high in September, driven by rising costs for medical care, clothing, car insurance and airfares.

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