As they do every year, the IRS has announced the key changes to the 2025 filing season. This includes the updates to tax brackets, as well as the standard deduction rates per filing status. We strongly recommend discussing your tax situation with a qualified Tax Professional to make sure you stay in line with all current tax laws, requirements, and regulations.
The key changes are outlined below.
The Internal Revenue Procedure 2024-40, detailing adjustments and modifications to over 60 tax provisions that will affect returns filed in 2026. Key updates for 2025 include changes to the standard deduction:
- $15,000 for single taxpayers and married individuals filing separately, a $400 increase from 2024.
- $30,000 for married couples filing jointly, an $800 increase from 2024.
- $22,500 for heads of household, a $600 increase from 2024.
The marginal tax rates for individual single taxpayers and married couples filing jointly in 2025 are as follows:
- 37% for incomes over $626,350 ($751,600 for married couples).
- 35% for incomes over $250,525 ($501,050 for married couples).
- 32% for incomes over $197,300 ($394,600 for married couples).
- 24% for incomes over $103,350 ($206,700 for married couples).
- 22% for incomes over $48,475 ($96,950 for married couples).
- 12% for incomes over $11,925 ($23,850 for married couples).
- 10% for incomes of $11,925 or less ($23,850 or less for married couples).
Medical Savings Accounts
For participants with self-only coverage in medical savings accounts for 2025, the annual deductible must be at least $2,850, a $50 increase from 2024, and not exceed $4,300, a $150 increase. The maximum out-of-pocket expense is now $5,700, up from $5,550 in 2024. For family coverage, the annual deductible is at least $5,700, a $150 increase, and cannot exceed $8,550, a $200 increase. The maximum out-of-pocket limit for family coverage is $10,500, an increase of $300 from 2024.
Other Notable Changes
- Earned Income Tax Credit Maximum: $8,046 for 2025, up from $7,830 in 2024.
- Annual Exclusion for Gifts: $19,000, a $1,000 increase from 2024.
- Estate Tax Basic Exclusion Amount: $13,990,000, up from $13,610,000 for decedents in 2024.
- Alternative Minimum Tax Exemption: $88,100 for unmarried individuals ($137,000 for married couples), beginning to phase out at $626,350 ($1,252,700 for married couples).
- Employee Salary Reduction Limit for Health Flexible Spending Accounts: $3,300, an increase of $100 from 2024. For cafeteria plans that allow carryover of unused amounts, the maximum carryover is now $660, up from $640 in 2024.
