New IRS 2025 Tax Brackets: How You Can Pay Less Taxes This Year

The IRS has just rolled out its 2025 tax bracket updates, and there’s good news—millions of taxpayers will see lower taxes on their returns. With changes to tax rates, standard deductions, and capital gains limits, you’ll be able to keep more of your hard-earned money.

Here’s a breakdown of everything you need to know to save on taxes this year.

2025 Tax Brackets Explained: What’s Changing?

The 2025 tax rates still range from 10% to 37%, but the IRS has adjusted the income thresholds. This means more of your income will now be taxed at lower rates.

How It Works

Tax brackets don’t mean all of your income gets taxed at the same rate. Instead, think of the system as a series of buckets:

• The first portion of your income is taxed at the lowest rate (10%).

• As you earn more, additional income is taxed in higher brackets.

For single taxpayers in 2025:

• 10% on the first ~$11,200

• 12% up to ~$48,000

• 22% up to ~$103,000

For example, if you earn $100,000, part of your income is taxed at 10%, part at 12%, and part at 22%. Only the portion above each threshold moves into the higher bracket.

Big Jumps in Tax Rates: What to Watch For

Two major jumps in the tax brackets are worth noting:

1. The jump from 12% to 22% happens when single earners make over ~$48,000.

2. The next significant jump is from 24% to 32%, hitting single earners making over ~$197,000.

Understanding these changes can help you plan strategically, especially if you’re close to moving into a higher bracket.

2025 Tax Brackets for Married Couples

Married taxpayers get even more room to breathe. The thresholds are almost double compared to single filers:

• 10% tax on the first ~$24,000

• 12% up to ~$99,000

• 22% up to ~$197,000

For a household earning six figures, this is a huge benefit. Married couples can report more income at lower tax rates, reducing their overall tax bill.

Standard Deduction Increases in 2025

The standard deduction has gone up again, which is great news for most taxpayers.

• Single filers: $15,500 (up from $14,600 in 2024)

• Head of Household: $22,500

• Married Couples: $30,000

What does this mean for you? If you don’t itemize deductions, the higher standard deduction will automatically lower your taxable income—saving you money.

For example, if you’re married and in the 37% tax bracket, this higher deduction could save you over $11,000 in taxes.

Capital Gains Tax Changes for 2025

If you’re an investor, there’s more good news. The IRS has adjusted the thresholds for long-term capital gains tax:

• 0% Tax: Single filers earning up to ~$48,000; married couples up to ~$97,000.

• 15% Tax: Income above this up to ~$530,000 for single filers and ~$600,000 for married couples.

• 20% Tax: Income above ~$530,000 (single) or ~$600,000 (married).

For example: In 2024, married couples earning $94,000 paid 15% tax on certain gains. In 2025, they’ll pay 0% tax on those same gains—saving them hundreds of dollars.

How These Changes Add Up to Big Savings

The 2025 tax bracket adjustments, paired with the higher standard deduction and capital gains benefits, allow taxpayers to:

1. Keep more income in lower tax brackets.

2. Automatically reduce taxable income with the standard deduction.

3. Save on long-term capital gains if they sell investments.

By planning carefully—like strategically timing income or capital gains—you can take full advantage of these IRS updates.

Conclusion: Make the Most of the 2025 Tax Changes

The IRS’s 2025 updates are designed to help taxpayers save more on their returns. Whether you’re earning wages, investing, or planning for retirement, understanding these changes can make a big difference.

If you want to maximize your savings, focus on:

• Keeping taxable income in lower brackets.

• Utilizing the higher standard deduction.

• Timing capital gains to qualify for lower rates.

Smart planning now means more money in your pocket later.

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