The upcoming changes to federal income tax brackets in 2025 could result in a slightly bigger paycheck for some, but inflation's continued impact may offset those gains. Learn about the adjustments and how they might affect your take-home pay.
Your paycheck could be slightly bigger in 2025 due to federal income tax brackets inflation adjustments. Regardless, you should monitor federal and state tax withholdings throughout the year to avoid a surprise tax bill. The yearly inflation adjustment is 'much less drastic this year' amid cooling inflation, said certified public accountant Brian Long, senior tax advisor at Wealth Enhancement in Minneapolis. It's time to boost 401(k) contributions for 2025 — here's how much you can save.
If you're starting 2025 with similar wages to 2024, your take-home pay — or compensation after taxes and benefit deductions — could be a little higher, depending on 'When all the tax brackets go up, but your salary stays the same, relatively, that puts you on a lower rung of the ladder,' he said. The federal income tax brackets show how much you owe on each part of your 'taxable income,' which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income. 'Even if you make a little more than last year, you could actually pay less in tax in 2025 compared to 2024,' because the standard deduction also increased, Long said. For 2025, the standard deduction increases to $30,000 for married couples filing jointly, up from $29,200 in 2024. The tax break is also larger for single filers, who can claim $15,000 in 2025, a bump from $14,600. Despite tax bracket changes, many Americans won't feel the pay increase amid elevated prices for certain expenses, said Sheneya Wilson, a CPA and founder of Fola Financial in New York. While inflation is no longer accelerating, there was an uptick in the cost of groceries, gasoline and new cars in November, according to the Bureau of Labor Statistics.Typically, if you withhold too much from your paycheck, you can expect a refund, whereas not withholding enough often results in taxes owe
Taxes Inflation Income Paycheck 2025
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
This tax-free corner of the fixed income space still has plenty of potential in 2025Rate policy and action in Washington remain on the radar for muni bond investors in the new year, but the tax-exempt issues are still attractive.
Read more »
Popular EVs Lose Federal Tax Credit Eligibility in 2025Several electric and plug-in hybrid vehicles, including the Chevrolet Bolt EV, Nissan Leaf, Rivian R1S, and Volkswagen ID.4, will no longer be eligible for a federal tax credit of up to $7,500 in 2025. This change significantly impacts the EV market, with the list of eligible models shrinking considerably.
Read more »
2025 Paycheck Increase: Federal Tax Brackets Adjusted for InflationFederal income tax brackets are adjusted for inflation in 2025, potentially leading to slightly higher take-home pay. However, individuals are advised to monitor their withholdings throughout the year to avoid tax surprises. While the standard deduction also increased, rising prices for certain expenses may offset the impact of the tax adjustments for many Americans.
Read more »
Federal Tax Brackets Inflation Adjustments Could Mean a Bigger Paycheck in 2025Federal income tax brackets are set to increase in 2025 due to inflation. This could result in a slightly larger take-home pay for some Americans, as their income will fall into a lower tax bracket. However, it's important to monitor tax withholdings throughout the year to avoid a surprise tax bill.
Read more »
2025 Tax Filing Season Brings Lower Increase in Tax Brackets and Standard DeductionsThe IRS is increasing its tax brackets by about 2.75% for both individual and married filers in tax year 2025. Standard deductions are also increasing, but at a slower rate than in recent years. This news comes alongside a 2.5% cost-of-living adjustment for Social Security recipients, which is also lower than previous years.
Read more »
BREAKING: Bruins' 2025 2025 Football Schedule RevealedThe Big Ten announced its football schedule for the 2025 season, and UCLA's schedule will feature a few familiar faces and multiple teams it did not play this past season in its first year in the Big Ten.
Read more »