Each year, the IRS adjusts dozens of key tax provisions to account for inflation. This crucial process, known as indexing, prevents “bracket creep”—a situation where inflation pushes you into a higher tax bracket even though your real purchasing power hasn’t increased. As we move through the 2025 calendar year, we can now project with a high degree of confidence what the new tax brackets and standard deduction amounts will be for the return you’ll file in 2026.
While the IRS won’t release the official, finalized figures until late fall 2025, these projections are essential for effective tax planning today.
How Does the IRS Calculate These Adjustments?
The process isn’t arbitrary. The IRS uses a specific formula tied to the annual change in the Consumer Price Index for All Urban Consumers (CPI-U). By looking at the average inflation over a 12-month period (from September 2024 to August 2025), they determine the percentage increase for the next tax year’s thresholds. The projections below are based on current economic data and historical rounding methods used by the IRS.
Projected 2025 Standard Deduction
The standard deduction is used by the vast majority of taxpayers. For 2025, expect a moderate increase, shielding more of your income from tax right off the bat.
| Filing Status | 2024 Standard Deduction (for comparison) | Projected 2025 Standard Deduction |
|---|---|---|
| Single | $14,600 | ~$15,100 |
| Married Filing Jointly | $29,200 | ~$30,200 |
| Head of Household | $21,900 | ~$22,650 |
| Additional Amount (Age 65+ or Blind) | $1,550 (Married) / $1,950 (Single) | ~$1,600 (Married) / ~$2,000 (Single) |
Projected 2025 Federal Income Tax Brackets
The income thresholds for each tax bracket will also shift upward. This means you can earn more money before being pushed into the next higher tax bracket.
Projected 2025 Tax Brackets (Married Filing Jointly)
| Tax Rate | 2024 Taxable Income | Projected 2025 Taxable Income |
|---|---|---|
| 10% | $0 to $23,200 | $0 to ~$24,000 |
| 12% | $23,201 to $94,300 | ~$24,001 to ~$97,450 |
| 22% | $94,301 to $201,050 | ~$97,451 to ~$207,800 |
| 24% | $201,051 to $383,900 | ~$207,801 to ~$396,800 |
Projected 2025 Tax Brackets (Single Filers)
| Tax Rate | 2024 Taxable Income | Projected 2025 Taxable Income |
|---|---|---|
| 10% | $0 to $11,600 | $0 to ~$12,000 |
| 12% | $11,601 to $47,150 | ~$12,001 to ~$48,725 |
| 22% | $47,151 to $100,525 | ~$48,726 to ~$103,900 |
| 24% | $100,526 to $191,950 | ~$103,901 to ~$198,400 |
Other Key Projected Figures for 2025
Many other limits and thresholds are also indexed for inflation. Here are some key projections:
- 401(k), 403(b) Contribution Limit: Likely to increase from $23,000 in 2024 to ~$23,500 or $24,000.
- IRA Contribution Limit: May increase from $7,000 in 2024 to ~$7,500.
- Health Savings Account (HSA) Contribution Limit (Self-Only): Likely to increase from $4,150 in 2024 to ~$4,300.
- Annual Gift Tax Exclusion: May increase from $18,000 in 2024 to ~$19,000.
Why This Matters for Your Planning in 2025
These numbers aren’t just trivia; they are powerful tools for mid-year financial planning.
- Adjust Your Withholding: With higher standard deductions and wider brackets, you might be over-withholding on your paycheck. You can use the IRS Tax Withholding Estimator to see if you can adjust your Form W-4 to increase your take-home pay now.
- Boost Your Savings: The projected increase in retirement and HSA contribution limits is a direct call to action. If you can afford it, plan to increase your automatic contributions to take full advantage of these tax-advantaged accounts.
- Refine Your Tax Strategy: For retirees and investors, knowing the projected bracket thresholds is key for managing Roth conversions, timing capital gains, or making other strategic moves to keep your taxable income within a desired range.
Disclaimer: The figures presented in this article for the 2025 tax year are projections based on available economic data and are for informational purposes only. They are not official IRS figures. The Internal Revenue Service will release the final, official inflation-adjusted numbers in the fall of 2025. Please consult with a qualified tax professional for advice tailored to your specific situation.
