IRS Releases 2025 Tax Inflation Adjustments

The IRS has announced inflation adjustments for the tax year 2025, which will impact tax returns filed in 2026. Key changes include an increased standard deduction of $15,000 for singles, $30,000 for married couples filing jointly, and $22,500 for heads of household. Tax bracket thresholds and alternative minimum tax exemptions are adjusted, while the top tax rate remains 37%. The Earned Income Tax Credit maximum rises to $8,046 for those with three or more qualifying children, and limits on fringe benefits, health flexible spending, and medical savings accounts also increase. The foreign earned income exclusion grows to $130,000, and estate and gift exclusions rise. Certain items, such as personal exemptions and limitations on itemized deductions, remain unchanged due to previous legislative adjustments.

If you would like to read more, please visit:

https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025