The IRS revealed hundreds of other elements for 2025, including its inflation-adjusted tax brackets.
According to Emory University finance specialist Usha Rackliffe, the largest change from prior years to 2025 is the 2.8% adjustment to income tax bands.
“Which is significantly less than prior years,” Rackliffe said.
What does this entail for a taxpayer in 2025 as opposed to 2024? For instance, according to Rackliffe, a single person earning $120,000 annually who takes a standard deduction will save some money.
“In 2025, because of the changes in these tax brackets, you would save in your tax bill approximately $300,” Rackliffe said.
Additionally, she stated that married couples filing jointly will experience the same issue.
“So everybody will see a little bit of savings in their taxes,” Rackliffe stated.
According to American University tax expert Caroline Bruckner, there will be further changes in 2025 besides these tax bracket changes.
Additionally, certain sections of the Tax Cuts and Jobs Act are scheduled to expire at the end of the next year.
“The individual tax changes are set to expire in 2025,” Bruckner stated.
Although it’s crucial to monitor changes in tax brackets, she thinks there may be even more changes in store next year.
“These are hugely important budgetary debates and will impact American families’ kitchen table discussions,” said Bruckner.
The IRS increased numbers for additional provisions, such as long-term capital gains, estate and gift tax exemptions, and earned income tax credit eligibility, in addition to the tax bracket increases.
