Every fall, the Internal Revenue Service adjusts the federal income tax brackets, the standard deduction, and other thresholds of the tax code for inflation.
Below are the tax brackets for income earned in 2024, for which taxpayers file a return in 2025. Taxable income equals adjusted gross income minus deductions or exemptions. One common deduction taken by most taxpayers is the standard deduction, which in 2024 is $14,600 for single filers and married filing separately, $29,200 for married filing jointly, and $21,900 for head of household filers.
Other key adjustments for tax year 2024 include:
401(k) contribution limit is $23,000 for employee contributions. Catch-up contribution limit for age 50 or over is $7,500.
Flexible Spending Account (FSA) contribution limit is $3,200 and maximum carryover amount is $640.
Health Spending Account (HSA) contribution limit is $4,150 for self-only and $8,300 for family.
Alternative Minimum Tax (AMT) exemption amount is $85,700 ($133,300 for married filing jointly) and begins to phase out at $609,350 ($1,218,700 for married filing jointly).
Earned Income Tax Credit (EITC) maximum amount is $7,830.
Child Tax Credit (CTC) maximum refundable amount is $1,700.
Qualified Transportation Fringe amount is $315 per month.
Foreign earned income exclusion is $126,500.
Estate tax exclusion amount is $13,610,000.
The gift tax exclusion is $18,000.
Below are the tax brackets for income earned in 2025, for which taxpayers file a return in 2026. The standard deduction will increase to $15,000 for single filers and married filing separately, $30,000 for married filing jointly, and $22,500 for heads of household filers.
The maximum refundable credit for the Child Tax Credit will remain the same as tax year 2024 at $1,700. Other key adjustments for tax year 2025 include:
401(k) contribution limit is $23,500 for employee contributions. Catch-up contribution limit for age 50 or over is $7,500.
Flexible Spending Account (FSA) contribution limit is $3,300 and maximum carryover amount is $660.
Health Spending Account (HSA) contribution limit is $4,300 for self-only and $8,550 for family.
Alternative Minimum Tax (AMT) exemption amount is $88,100 ($137,000 for married filing jointly) and begins to phase out at $626,350 ($1,252,700 for married filing jointly).
Earned Income Tax Credit (EITC) maximum amount is $8,046.
Qualified Transportation Fringe amount is $325 per month.
Foreign earned income exclusion is $130,000.
Estate tax exclusion amount is $13,990,000.
The gift tax exclusion is $19,000.