The IRS has announced its annual inflation adjustments for the tax year 2025. These adjustments include the marginal tax rates, the standard deduction, the annual gift exclusion, and the foreign earned income exclusion.
Marginal Tax Rates
The 2025 tax brackets reflect an increase of roughly 2.8% versus 2024.
For 2025, the marginal tax rates are:
• 37% for incomes over $626,350 (or $751,600 for married couples filing jointly “MFJ”)
• 35% for incomes over $250,525 ($501,050 for MFJ)
• 32% for incomes over $197,300 ($394,600 for MFJ)
• 24% for incomes over $103,350 ($206,700 for MFJ)
• 22% for incomes over $48,475 ($96,950 for MFJ)
• 12% for incomes over $11,925 ($23,850 for MFJ)
• 10% for incomes $11,925 or less ($23,850 or less for MFJ)
Source: Washington Post
Standard Deduction
For single taxpayers and married individuals filing separately, the standard deduction is $15,000 for 2025, an increase of $400 from 2024.
For married couples filing jointly, the standard deduction is $30,000 for 2025, an increase of $800 from tax year 2024.
For heads of households, the standard deduction is $22,500 for 2025, an increase of $600 from the amount for tax year 2024.
Annual Gift Exclusion
The annual exclusion for gifts increases to $19,000 for 2025, from $18,000 for 2024.
Foreign Earned Income Exclusion
For 2025, the foreign earned income exclusion increases to $130,000, from $126,500 for 2024.
You can read the full details of the IRS announcement here (link opens in new browser tab).
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