Tax Brackets for 2024 vs. Tax Brackets for 2025 : How Much Will They Change?

Navigating the 2024 Tax Season: Key Changes and Tips

Tax Brackets for 2024 vs. Tax Brackets for 2025 : How Much Will They Change? With the 2025 tax season on the horizon, many Americans are preparing to file their returns. This year, the Internal Revenue Service (IRS) has announced several adjustments to tax provisions, including increased standard deductions, to help offset the impact of inflation.

For example, the standard deduction for single filers and heads of households has increased to $14,600, while married couples filing jointly can now claim a standard deduction of $29,200. These adjustments aim to provide some relief to taxpayers as they navigate the complexities of the tax code.

With the 2024 tax season just around the corner, it’s crucial to stay informed about the latest changes to tax laws and regulations. The Internal Revenue Service (IRS) has announced several adjustments for the upcoming tax year, which could significantly impact your tax liability.

IRS tax rates for tax year 2024

The IRS announced tax rates for its seven tax brackets for tax year 2024:

37% – Single income over $609,350 and married couples filing jointly with income over $731,200
35% – Single income over $243,725 and married couples filing jointly with income over $487,450
32% – Single income over $191,950 and married couples filing jointly with income over $383,900
24% – Single income over $100,525 and married couples filing jointly with income over $201,050
22% – Single income over $47,150 and married couples filing jointly with income over $94,300
12% – Single income over $11,600 and married couples filing jointly with income over $23,200
10% – Single income of $11,600 or less and married couples filing jointly with income less than $23,200

Yes, tax brackets are changing for tax year 2025.

37% − Single income over $626,350 and married couples filing jointly with income over $751,600
35% – Single income over $250,525 and married couples filing jointly with income over $501,050
32% – Single income over $197,300 and married couples filing jointly with income over $394,600
24% – Single income over $103,350 and married couples filing jointly with income over $206,700
22% – Single income over $48,475 and married couples filing jointly with income over $96,950
12% – Single income over $11,925 and married couples filing jointly with income over $23,850
10% – Single income of $11,925 or less and married couples filing jointly with income less than $23,850

According to the IRS, for qualifying taxpayers with three or more qualifying children, the new maximum Earned Income Tax Credit amount will be $8,046, up $216 from tax year 2024.

Standard Deduction Increases

One of the most significant changes for 2024 is the increase in standard deductions. This means that many taxpayers will be able to reduce their taxable income and pay less in taxes.

Single filers and heads of households: The standard deduction has increased by $750 and $1,100, respectively.
Married couples filing jointly: The standard deduction has increased by $1,500.

Adjusted Tax Brackets

The IRS has also adjusted the tax brackets for 2024. This means that the amount of income you pay taxes on and the corresponding tax rates may have changed.

Key Tax Exemptions and Credits for 2024

The Internal Revenue Service (IRS) has made adjustments to several tax exemptions and credits for the 2024 tax year. Here are some of the key changes:

Alternative Minimum Tax (AMT):

The AMT exemption amount has increased for 2024, which could benefit high-income taxpayers who have certain deductions and credits. This change could reduce the number of taxpayers subject to the AMT.

Earned Income Tax Credit (EITC):

The maximum EITC amount for families with three or more qualifying children has increased for 2024.¹ This credit can provide significant tax relief for low-income families.²

Earned Income Tax Credit (EITC)

The maximum EITC amount for families with three or more qualifying children has increased for 2024. This credit can provide significant tax relief for low-income families.

Health Savings Account (HSA) Contributions

The annual contribution limit for HSAs has increased for 2024. This means that eligible individuals can save more for future medical expenses.

To ensure a smooth tax filing process, consider the following tips:

Gather Your Tax Documents: Collect all necessary documents, such as W-2s, 1099s, and receipts for deductions and credits.
Choose the Right Filing Method: Decide whether you’ll file electronically or by paper. Electronic filing is generally faster and more accurate.
Consider Professional Help: If you have complex tax situations or need assistance, consult with a tax professional.
Stay Updated on Tax Changes: Keep an eye on any new tax laws or regulations that may affect your return.
File Your Return on Time: Avoid penalties by filing your return before the deadline.