The IRS just announced its inflation adjusted tax brackets for 2025 along with dozens of other provisions for next year.
FILE - The Internal Revenue Service 1040 tax form for 2022 is seen on April 17, 2023. Usha Rackliffe, a finance expert at Emory University said the biggest difference in 2025 compared to previous years is that the income tax brackets have been adjusted by 2.8%.What does this mean for someone paying taxes in 2025 compared to 2024? Rackliffe said for example, if you're a single person making $120,000/year and taking a standard deduction, you will save some money.
"In 2025, because of the changes in these tax brackets, you would save in your tax bill approximately $300," Rackliffe said."So everybody will see a little bit of savings in their taxes," said Rackliffe. Caroline Bruckner, a tax expert at American University said these tax bracket adjustments aren't the only things changing in 2025. DifferentShe believes that while it's important to keep tabs on the tax bracket adjustments, next year could come with even more changes.
"These are hugely important budgetary debates and they will impact American families' kitchen table discussions," said Bruckner. Along with the tax bracket adjustments, the IRS also boosted figures for other provisions like long-term capital gains, estate and gift tax exemptions and eligibility for the earned income tax credit.
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