Source: The College Investor
Key Points
- The Internal Revenue Service (IRS) has increased the tax brackets for 2025
- The Standard Deduction is also going to be higher for 2025
- Single taxpayers must earn over $626,351 to be in the highest 37% tax rate
The IRS announced its changes for the 2025 tax filing season, which included increases to the tax brackets and other key areas. What this means for taxpayers is that more income can be taxed at lower rates than previous years. There was also an increase of $400 to $800 in the standard deduction.
For 2025, single borrowers must earn over $626,351, while married couples must earn over $751,601 to be in the highest 37% tax bracket.
It's important to remember that you only pay what you earn in that bracket. Even the highest earner in America will pay 10% on their first $11,925 in earnings.
There were also changes to the capital gains tax brackets for 2025 as well.
Related: How Effective Tax Rates Work
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Federal Tax Brackets For 2025
Here are the Federal tax brackets for 2025.
Data: IRS Inflation Adjustments For 2025. Image: The College Investor
The Standard Deduction also increased for 2025. It will be:
- Single: $15,000
- Married Filing Jointly: $30,000
- Head of Household: $22,500
Check out this guide to all the Federal Tax Brackets And Tax Tables.
Capital Gains Tax Brackets Also Increased
The capital gains tax brackets also increased their ranges. While the short term capital gains are the same as your normal tax bracket, long term gains are taxed as follows:
Data: IRS Inflation Adjustments For 2025. Image: The College Investor
Other Key Changes
Beyond the tax brackets, it is expected that there will be increases to the IRA Contribution Limit and 401k Contribution Limit. The HSA contribution limit increase was already announced earlier this year.
The IRS also updated the Alternative Minimum Tax exemption, and the Earned Income Tax Credit amounts.
Finally, there were updates to a variety of exclusions, include the foreign earned income exclusion and the estate and gift tax exclusion.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.