The IRS unveils updated federal income tax rates for 2025.

• For the tax year 2025, the IRS has introduced new federal tax brackets that have been adjusted to account for inflation.
• The standard deduction for married couples filing together will rise to $30,000, while single taxpayers will see an increase of $15,000.
• The tax laws have undergone significant changes, including updates to long-term capital gains brackets, estate tax exemption, and child tax credit eligibility.

New federal income tax brackets and standard deductions have been announced by the IRS for 2025.

The IRS has increased the income thresholds for each tax bracket, effective for tax year 2025, with the top rate of 37% applying to individuals with taxable income over $626,350 and married couples filing jointly earning $751,600 or more. Additionally, the agency has raised figures for numerous other provisions, including long-term capital gains brackets, estate and gift tax exemption, and eligibility for the child tax credit, among others.

The tax brackets may increase after 2025, which could affect your brokerage account.

Federal tax brackets for 2025

Your taxable income is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income, and the federal income tax brackets determine how much you owe on each part of it.

• Single taxpayers with incomes over $626,350 and married couples filing jointly with incomes over $751,600 will be subject to a 37% tax rate.
• Incomes over $250,525 ($501,050 for married couples filing jointly) are taxed at 35%.
• Incomes over $197,300 ($394,600 for married couples filing jointly) are taxed at 32%.
• Incomes over $103,350 ($206,700 for married couples filing jointly) are taxed at 24%.
• Incomes over $48,475 ($96,950 for married couples filing jointly) are taxed at 22%.
• Incomes over $11,925 ($23,850 for married couples filing jointly) are taxed at 12%.
• For incomes of $11,925 or less ($23,850 or less for married couples filing jointly), the tax rate is 10%.

Without Congressional action, the tax cuts enacted by former President Donald Trump will expire after 2025, causing the tax brackets to revert to their 2017 levels, which are 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.

Higher standard deduction

In 2025, the standard deduction for married couples filing jointly will increase from $29,200 to $30,000, while single filers will see a bump from $14,600 to $15,000.

If Congress fails to renew the tax break, the standard deductions included in Trump's tax cuts will expire after 2025.