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Ask The Expert: Tips for Filing Taxes
The tax filing deadline is just a couple days away. LiveNOW from FOX's Andrew Craft spoke with Marketwatch's Andrew Keshner for tips if you're filing last minute.
NEW YORK - Higher standard deductions are coming for U.S. taxpayers next year, allowing them to shield more of their money from taxation on future returns.
The Internal Revenue Service released the details of the increases in its annual inflation adjustments announced Tuesday.
For single taxpayers and married individuals filing separately in tax year 2025, the standard deduction is rising to $15,000 — up $400 from 2024.
For couples who file jointly, that standard deduction will be $30,000 for 2025, an $800 jump from the year prior. And heads of households will get a $22,500 standard deduction, up $600 from 2024.
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Income thresholds for all seven federal tax bracket levels were also revised upward. The top tax rate, which remains 37%, will cover incomes greater than $626,350 for single taxpayers in tax year 2025, for example — compared to $609,350 in 2024.
The IRS makes such adjustments for each tax year to account for inflation, which has recently been on a downward trend. Last month, inflation in the U.S. dropped to its lowest point in more than three years, marking some encouraging economic news — but Americans are still feeling some key price pressures.
"Core" prices, a gauge of underlying inflation, remained elevated in September, driven up by rising costs for medical care, clothing, auto insurance and airline fares.
While taxpayers will again see higher standard deductions for 2025, the increases announced Tuesday are less than those seen in recent years. In tax adjustments announced last year, for example, the IRS raised single filers’ standard deduction by $750 between the 2023 and 2024 tax years — and by $1,500 and $1,100 for married couples and heads of households, respectively.