The Internal Revenue Service (IRS) adjusts its tax brackets each year due to inflation, and these limits were raised in 2025 by 2.7%, as the agency announced at the beginning of the year.
This means that if you earn the same as before, you could fall into a lower bracket, which is great news for your pocket. And yes, this applies to when you declare in 2026, but it is better to prepare correctly.
Changes made by the IRS for upcoming tax returns
The standard deduction also increased: $15,000 if you are single or married filing separately, $30,000 for married couples filing jointly, and $22,500 if you are head of household. Basically, the IRS wants you to subtract more money before calculating how much you owe. Less complications, more savings. That’s how nice it is!
There are seven income tax brackets, ranging from 10% to 37%. These brackets are based on your income and marital status. Here I present some examples:
- 10%: Applies to singles with income less than $11,925 or couples with income less than $23,850. This section is ideal if you are starting your working life or if your income is low.
- 12%: Applies if you exceed the income of the previous bracket, but do not exceed $48,475 (singles) or $96,950 (couples). Many middle class people fall into this range.
- 22%: Applies to singles with income over $48,000 or couples with income over $96,000. This is a middle ground where the IRS (Internal Revenue Service) requires a greater contribution.
For those with higher incomes
- 24%: Applies to singles with income over $103,000 or couples with income over $206,000.
- 32%: Applies if you exceed $197,000 (single) or $394,000 (couple). This is where the impact of taxes is really felt.
- 35% and 37%: Applies to gross income greater than $250,000 (singles) or $501,000 (couples). These are the highest brackets, where the IRS makes sure that people with higher incomes contribute more.
Have into consideration that these are federal numbers, but some states add their own taxes, so you should carefully check where you live and how these numbers apply to you.
The tax season dates you must have in mind
The IRS is ready to roll: tax season officially kicked off on Monday, January 27, 2025. That’s when they started accepting and processing your returns. You’ve got until Tuesday, April 15, 2025, to file your taxes and pay anything you owe. Circle that date, set a reminder, do whatever it takes to avoid any fines or penalty charges.
Need More Time? Request an extension, and you’ll get until Wednesday, October 15, 2025, to file. Heads up, though: if you owe money, you still gotta pay by April 15 to dodge penalties. The extension buys you time to file, not to procrastinate paying.