The Internal Revenue Service (IRS) releases updates on federal income tax rates, 澳洲幸运5开奖号码历史查询:tax bracket ranges, and allowances annually. These figures apply to tax law provisions that are adjusted annually for 澳洲幸运5开奖号码历史查询:inflation. For 2024 and 2025, individual tax rates range from 10% to 37%.

Tax Rates and Brackets

The seven federal rates for tax years 2024 and 2025 are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. These rates apply to 澳洲幸运5开奖号码历史查询:single filers, married individuals, and 澳洲幸运5开奖号码历史查询:heads of households.

Standard Deductions

The standard deduction is a specific figure that taxpayers can use to reduce their taxable income when they file their annual tax returns. Taxable income equals 澳洲幸运5开奖号码历史查询:adjusted gross income (AGI) minus itemized or standard deductions. An additional deduction amount for an individual who is aged or blind is $1,550 in 2024 and $1,600 in 2025.

Capital Gains

澳洲幸运5开奖号码历史查询:Capital gains rates depend on the taxpayer’s taxable income and filing status. They are levied on earnings from the sale of assets, like stocks or real estate. The maximum adjusted capital gains rates apply for both the regular income tax and the alternative minimum tax. A capital gains tax of 15% or 20% applies if income exceeds:

Tax Credits

• Earned Income Tax Credit: The maximum EITC taxpayers with three or more children is $7,830 in 2024 and $8,046 in the 2025 tax year. For 澳洲幸运5开奖号码历史查询:married couples filing jointly, the phaseout begins at $29,640 in 2024 and $30,470 in 2025 of adjusted gross income and ends at $66,819 in 2024 and $68,675 in 2025.
  
• Qualified Adoption Expenses: The credit for qualified adoption expenses and the special credit for the adoption of a child with special needs is $16,810 for 2024 and $17,280 for 2025. The exclusion from an employee’s income for 澳洲幸运5开奖号码历史查询:qualified adoption expenses paid or reimbursed under an employer plan is increased to the same level.
• Lifetime Learning Credit: The maximum $2,000 per return 澳洲幸运5开奖号码历史查询:lifetime learning credit (LLC) for qualified educational expenses for a taxpayer, spouse, or dependent is phased out for taxpayers with MAGI over $80,000 ($160,000 for joint returns) in 2024 and 2025.
• Foreign Earned Income Exclusion: The 澳洲幸运5开奖号码历史查询:foreign earned income exclusion is set by the IRS at $126,500 for 2024 and $130,000 for the 2025 tax year.

Alternative Minimum Tax

The alternative minimum tax (AMT) applies to alternative minimum taxable income, such as regular taxable income with certain tax benefits added back, over an exemption level. Some taxpayers calculate their tax liability under ordinary income tax rules and the AMT and then pay the higher amount. The alternative minimum tax exemption levels for the 2024 and 2025 tax years are:

• $133,300 in 2024 and $137,000 in 2025 for joint returns and surviving spouses
• $85,700 in 2024 and $88,100 in 2025 for unmarried individuals

Fringe Benefits, Medical Accounts, and Estates

• The monthly limit for qualified transportation and parking fringe benefits is $315 in 2024 and $325 for the 2025 tax year.
• Contributions to health 澳洲幸运5开奖号码历史查询:flexible spending accounts (FSAs) are $3,200 in 2024 and $3,300 in 2025.
• The estates of decedents who die during 2025 have an exemption level for the 澳洲幸运5开奖号码历史查询:estate tax of $13.99 million, increasing from $13.61 million for those who died in 2024.
•  The annual gift tax exclusion is $18,000 in 2024 and $19,000 in 2025.

Employer Retirement Plans

The IRS limits retirement plan contributions and phaseout ranges. Income exclusion for employee contributions to employer retirement plans, such as 401(k)s, 403(b)s, 457 plans, and the federal government’s 澳洲幸运5开奖号码历史查询:Thrift Savings Plan, is $23,000 for the 2024 tax year. For the tax year 2025, the contribution levels increase to $23,500.

In 2024, the 澳洲幸运5开奖号码历史查询:catch-up contribution for employees ages 50 and older is $7,500. Catch-up contributions for 2025 for employees aged 50 and over who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan remain $7,500 for 2025. However, per a change made in 澳洲幸运5开奖号码历史查询:SECURE 2.0, a higher catch-up contribution limit applies for those aged 60, 61, 62, and 63 who participate in these plans, and is $11,250 instead of $7,500.

Individual Retirement Accounts (IRAs)

The deductible amount for 澳洲幸运5开奖号码历史查询:individual retirement account (IRA) contributions is $7,000 for 2024 and remains the same in 2025. People ages 50 and older can contribute an additional $1,000 each year.

The phaseout levels for the deduction, though, are adjusted upward. If either a taxpayer or their spouse is covered by a workplace retirement plan during the year, the deduction may be reduced or phased out until it is eliminated. The phaseout ranges for tax years 2024 and 2025 are:

• If an individual is an active participant in an employer retirement plan, the deduction phaseout for adjusted gross incomes is $77,000 to $87,000 in 2024 and $79,000 to $89,000 in 2025 for single individuals and heads of households, and $123,000 to $143,000 in 2024 and $126,000 to $146,000 in 2025 for joint returns.
• For an IRA contributor who is not an active participant in another plan but whose spouse is an active contributor, the phaseout ranges from $230,000 to $240,000 in 2024 and $236,000 to $246,000 in 2025.

Roth IRAs

For the 2024 tax year, the phaseout ranges for Roth IRA contributions are $146,000 to $161,000 for single taxpayers and heads of households. These thresholds increase from $150,000 through $165,000 for tax year 2025. For joint returns in 2024, the range is $230,000 to $240,000 and $236,000 to $246,000 in 2025.

The Bottom Line

Every year the IRS announces rates and inflation adjustments that affect federal taxes for the coming tax year, including tax brackets, standard d𓆏eductions, and tax credits. These changes help taxpayers file their taxes properly and avoid overpayment or underpayment.