Federal Income Tax Brackets 2025

The United States federal income tax system uses a progressive tax system, meaning that as your income increases, so does your tax rate.

Each year, the Internal Revenue Service (IRS) adjusts over 60 tax provisions to account for inflation, a process designed to prevent “bracket creep.” Bracket creep occurs when inflation, rather than actual increases in income, causes taxpayers to move into higher income tax brackets or diminishes the value of credits and deductions.

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Historically, the IRS used the Consumer Price Index (CPI) to measure inflation for these adjustments. However, the Tax Cuts and Jobs Act of 2017 (TCJA) introduced the use of the Chained Consumer Price Index (C-CPI), which now determines changes to income thresholds, deduction amounts, and credit values.

For the federal income tax brackets 2025, inflation-adjusted tax parameters are set to rise by an average of 2.8 percent. These adjustments will affect tax returns filed in early 2026. While the income tax rates remain unchanged across the seven brackets—10%, 12%, 22%, 24%, 32%, 35%, and 37%—the income ranges for each bracket are revised annually to reflect inflation.

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For instance, in 2024, a single filer will pay a 10% tax rate on income up to $11,600. By 2025, that threshold increases to $11,925. This annual adjustment ensures that taxpayers are not pushed into higher brackets simply due to cost-of-living increases, maintaining fairness in the tax system. Now let us understand federal income tax brackets 2025.

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What Tax Bracket Am I In?

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To calculate your taxable income, begin by summing up all sources of income, including salary, wages, interest, dividends, and capital gains. Then, subtract any deductions and exemptions permitted by the IRS. Next, identify your filing status—such as single, married filing jointly, married filing separately, or head of household—that best fits your situation. Finally, refer to the IRS tax brackets or use an online tax calculator to align your taxable income and filing status with the applicable bracket, which determines the tax rate applied to your income.

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2025 Federal Income Tax Brackets: Single filers

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2025 Federal Income Tax Brackets: Married filing jointly

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Federal Income Tax Brackets 2025: Married filing separately

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Federal Income Tax Brackets 2025: Head of household

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Standard Deduction

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The standard deduction for 2025 will rise by $400 for single filers and $800 for joint filers (as shown in Table 2). Seniors aged 65 or older can claim an additional standard deduction of $2,000 for single filers and $1,600 for joint filers.

The personal exemption for 2025 remains at $0, as it was eliminated under the Tax Cuts and Jobs Act of 2017 (TCJA).

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Table 2. 2025 Standard Deduction

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Table 3. 2025 Alternative Minimum Tax (AMT) Exemptions

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Table 4. 2025 Alternative Minimum Tax (AMT) Exemption Phaseout ThresholdS

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Table 5. 2025 Earned Income Tax Credit (EITC) Parameters

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Table 6. 2025 Capital Gains Tax Brackets

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Table 7. 2025 Qualified Business Income Deduction Thresholds

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How to Get into a Lower Tax Bracket?

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A marginal tax rate is the percentage of tax applied to your last dollar of taxable income. It reflects the tax rate for the highest income bracket your earnings fall into as your income increases. Think of tax brackets as layers, each with its own rate. As you earn more, you move into higher brackets, and the marginal tax rate applies to the portion of your income in the highest bracket.

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For example, if you fall into the 22% tax bracket, your marginal tax rate is 22%. This means that for every extra dollar you earn, 22 cents will go to taxes. Understanding your marginal tax rate is essential for making sound financial decisions, such as assessing the impact of additional income or evaluating investment opportunities.

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How to reduce taxable income?  

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1. Legal Tax Deductions and Credits:  

• Contribute to Retirement Accounts:
• 401(k) plans
• Traditional IRAs
• Roth IRAs
• Health Savings Accounts (HSAs)

2. Claim Tax Credits:  

• Child Tax Credit
• Earned Income Tax Credit (EITC)
• American Opportunity Tax Credit
• Lifetime Learning Credit

3. Itemize Deductions:  

• Mortgage interest
• Property taxes
• Charitable donations
• Medical expenses (exceeding a certain percentage of your adjusted gross income)
• State and local taxes

4. Investment Strategies:  

• Tax-Loss Harvesting: Sell losing investments to offset capital gains.
• Tax-Advantaged Investments: Invest in tax-advantaged accounts like 401(k)s, IRAs, and 529 plans.
• Municipal Bonds: Interest income from municipal bonds is often exempt from federal income tax.

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