While we were ringing in 2025, some new tax laws took effect when the clock officially clicked over to Jan. 1.
Since I know many of you, and by you I mean me, have hangovers from eating, drinking and/or just plain staying up way past your normal bedtime last night (I'm guilty of all three!), I’m going to ease into the tax news on this first day of the brand New Year.
I’m starting with a couple of reminders of tax changes announced as last year was winding down.
You got it. The Internal Revenue Service's annual inflation adjustments to a wide variety of tax provisions.
All the changes for this year are covered in the ol’ blog’s 10-part tax inflation series, but the first segment is always of major interest. It looks at the coming new tax brackets.
So, after you’ve had enough coffee to deal with numbers, check out the full details for 2025's seven ordinary income tax brackets, as well as, for comparison purposes, the 2024 tax brackets that will apply when you file that tax year’s Form 1040 later this year, or later this month if you’re an early filer. They're all in 2025’s inflation-adjusted tax brackets will keep some taxpayers from being bumped to a higher rate.
But, as I promised, we're easing into the new tax year. So here are some highlights.
2025 tax bracket overview: For tax year 2025, the top 37 percent tax rate for individual single taxpayers will apply to those with incomes greater than $626,350. Married filing jointly couples who make a combined $751,600 will fall into that top tax bracket.
The other six tax brackets will affect the following income levels —
- 35 percent for incomes over $250,525 ($501,050 for married couples filing jointly);
- 32 percent for incomes over $197,300 ($394,600 for married couples filing jointly);
- 24 percent for incomes over $103,350 ($206,700 for married couples filing jointly);
- 22 percent for incomes over $48,475 ($96,950 for married couples filing jointly);
- 12 percent for incomes over $11,925 ($23,850 for married couples filing jointly); and
- 10 percent for incomes $11,925 or less ($23,850 or less for married couples filing jointly).
Again, the full income ranges are in the table in my previously mentioned post.
And again, you will use these brackets in 2026 when you file your 2025 tax return, not this year. But the 2024 amounts for this year's filings are including in the full tax brackets inflation post.
2025, 2024, 2 many tax years! I know, two tax years to think about in one day, especially one coming after a night of celebrating. Sorta sorry, but not totally sorry, since taxes don’t take holidays … expect in some states that hold sales tax holidays, usually in the summer in connection with back-to-school items.
But I’m getting ahead of myself. Really sorry this time.
When you are up to it, it’s a good idea to think about taxes sooner rather than later on any day of the year. If that’s later today when you’re feeling more energetic, or you’ve given up on the college football bowl you were watching because your team is losing, you can check out the full 2025 tax inflation series. There's a directory at the end of the Part 1 inflation series tax brackets post.
I’m being a tax noodge today for a good reason. Knowing about your tax tasks and obligations beforehand makes meeting them easier (that word again) and hopefully less costly.
And I’ll close with that — easier and less costly taxes — as (one of) my 2025 New Year’s tax resolutions. Happiest 2025 to you and yours, in taxes and everything!
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