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    • The IRS has released federal income tax brackets for 2024 income
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    The IRS has released federal income tax brackets for 2024 income

    Kathleen William Posted on

    2 minute read

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    The Internal Revenue Service has announced the inflation-adjusted federal income tax brackets for 2025.

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

    That represents an increase from the standard deduction of $29,200, or $14,600 in 2024. Federal tax cuts in 2017 included higher deductions that will expire next year unless Congress passes an extension of the tax break.

    Federal income tax brackets show how much you owe on each portion of your taxable income. The standard deduction is simply deducted from your income, and the remainder is then taxed at the following rates for 2025:

    • 37% for single filers with income over $626,350 or $751,600 for married couples filing jointly
    • 35% for income over $250,525 or $501,050 for married couples filing jointly
    • 32% for incomes over $197,300 or $394,600 for married couples filing jointly
    • 24% for incomes over $103,350 or $206,700 for married couples filing jointly
    • 22% for incomes over $48,475 or $96,950 for married couples filing jointly
    • 12% for income over $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 individual with taxable income of $58,000, anything up to $11,925 would be taxed at 10%, anything between $11,926 and $48,475 would be taxed at 12%, and anything between $48,576 and $58,000 -dollar at 22%.

    After 2025, the lower tax rates established as part of the 2017 federal tax cuts — known as the Tax Cuts and Jobs Act — will expire without action from Congress.

    Expiration would result in 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. Gifts under $19,000 are tax-free, up from $18,000 in 2024. The Earned Income Tax Credit – aimed at low- and middle-income working families with three or more children – is $8,046, up from $7,830. dollars in 2024.

    Meanwhile, the alternative minimum exemption for single filers increases to $88,100 — up $2,400 from 2024 — while for married individuals filing separately it is $68,650. The exemption for individual taxpayers will phase out at $626,350.

    For married couples filing jointly, the exemption starts at $137,000 and ends at $1,252,700.

    “An alternative minimum tax sets a floor on the percentage of taxes an applicant must pay to the government, regardless of how many deductions or credits the applicant can claim,” says an Investopedia post.

    What will stay the same next year?

    Personal exemptions remain at 0, as has been the case since 2018 under the Trump federal tax cuts. There will continue to be no limit on itemized deductions.

    The adjusted gross income that taxpayers use to determine their reduction under the Lifetime Learning Credit — which lowers your taxes to offset education costs — remains unchanged. The rule is currently eliminated for taxpayers who earn gross income of $80,000 individually or $160,000 for a joint tax return.

    Daniel Munoz covers business, consumer affairs, labor and economics for NorthJersey.com and The Record.

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

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    Kathleen William
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